This paper proposes a novel power generation system that implements mutually beneficial use of natural gas and coal. In conventional power plants fossil fuels are usually directly burned with air to convert the chemical energy to thermal energy for power generation. In combustion processes, about 30% of exergy of fuels is destructed, and the decrease in the irreversibility of combustion processes has large potential to improve the performance of power plants. The new system attempts to use chemical exergy of fuels before combustion through coordinated use of coal and natural gas. First approximate 60% of coal is gasified in a gasifier with air and steam as oxidant, then, the unconverted residuals (char) and natural gas are utilized synthetically based on the method of char-fired reforming to generate syngas, in which the combustion of char will drive the methane/steam-reforming reaction. The fuel gas from the partial gasification of coal and syngas from char-fired reforming are mixed together and fed into a combined cycle for power generation. As a result, the overall thermal efficiency of the new system is about 51.5% based on the current turbine technologies and the net thermal efficiency of coal to electricity of the new system can reach near 48.6%. The results obtained here may provide a new way of using coal and natural gas more efficiently and economically. (C) 2010 Elsevier Ltd. All rights reserved.