The gas engine-driven heat pump (GEHP), which has been considered as a preferable choice in the heating and air-conditioning scheme can make full use of the waste heat from the engine and achieve a higher primary energy ratio (PER) than other forms of heating/cooling systems. In this paper, the relationship between the capacity characteristic of the GEHP and the heating and cooling loads of buildings has been analyzed. Meanwhile the reasons of the imbalance of the urban electricity and natural gas consumptions between summer and winter have been studied. The running characteristic of a water-to-water GEHP has been investigated experimentally and the PER was measured. Based on the analysis and experimental results, it could be concluded that if both the gas-fired boilers and electric air conditioners are replaced by GEHPs in some percentage, we can narrow the gaps between the requirement and provision of electricity and natural gas and balance the seasonal consumption differences of electricity and natural gas between summer and winter simultaneously. In order to improve energy efficiency, environmental quality and energy consumption structure effectively, the governmental incentive policies for promoting use of GEHPs should be formulated in China and some other developing countries. (C) 2011 Elsevier Ltd. All rights reserved.