Ceres Power Ltd. has developed a novel solid oxide fuel cell (SOFC) concept based upon depositing a thick film positive-electrolyte-negative (PEN) structure on a porous stainless steel substrate, and using gadolinia-doped ceria (CGO) as the electrolyte material. This approach allows the temperature of operation to be reduced to below 600 degrees C, well below the conventional SOFC operating temperature. Historically, the use of CGO as an electrolyte material has been viewed as impractical because of its poor stability in reducing atmospheres at elevated temperatures, leading to electronic conductivity, which effectively short-circuits the cell leading to a loss of efficiency. In this work, a model is developed which accurately simulates the polarisation behaviour of a Ceres cell including electronic leakage. The parameters of this model are set to give the best possible fit to experimental data. This cell model is then incorporated into a model of a 2.5 kW(e) stack, and the stack model into a natural gas fuelled combined heat and power (CHP) system model. The system model demonstrates that high operating efficiencies are achievable for such a system based upon IT-SOFC cells with CGO electrolytes. (c) 2005 Elsevier B.V. All rights reserved.