Combined heat and power is the simultaneous production of electricity and heat. CHP plants produce energy in an efficient way. A natural gas CHP system based on an internal combustion engine (ICE) is described, which has been set up at the Building Energy Research Center in Beijing, China. The system is composed of an ICE, a flue gas heat exchanger, a jacket water heat exchanger and other assistant facilities. The ICE generates power on-site, and the exhaust of the ICE is recovered by the flue gas heat exchanger, and the heat of the engine jacket is recovered by the jacket water heat exchanger to district heating system. In order to improve the performance of the system, an absorption heat pump (AHP) is adopted. The exhaust of the ICE drives the AHP to recover the sensible and latent heat step by step, and the temperature of the exhaust could be lowered to below 30 degrees C. In this paper, the performance of the new system were tested and compared with conventional cogeneration systems. The results show that the new CHP system could increase the heat utilization efficiency 10% compared to conventional systems in winter. All the results could be valuable references for the improvement of the CHP system. (C) 2010 Elsevier Ltd. All rights reserved.