Energy costs and environmental concerns have made energy optimisation a viable option for buildings. Energy-efficient heating systems together with an effective use of buildings thermal mass and tightness have a significant impact on the energy requirement and on the possibility for sizeable running cost savings. In this study we use the simulation tool TRNSYS-EES to model and analyse the performance of a residential house and the low-temperature heating system that serves its thermal needs. The building is a single-family house with controlled ventilation and the chosen heating system is a hydronic floor heating system connected to an exhaust air heat pump. The aim of the simulation is to study the performance of the building, the heating system and the controls in an integrated manner. Overall, the results indicate that the energy efficiency issue implicates system design and system thinking concerns as well as techno-economic difficulties. Them controls and the choice of the operation mode are of a great importance. Copyright (C) 2004 John Wiley Sons, Ltd.