One of the possible solution for conventional coal-fired heat sources of district heating systems is repowering with a cogeneration of heat and power) unit. Thermal and economic optimization of the such modernization is the subject of the paper. The total capacity of the existing heat generating plant reaches 210 MW and the generated heat is delivered to the city consuming central heating and hot domestic water. The optimization of the cogeneration system (regarding unit size) was aimed at finding a solution which is an optimal in terms of the economic efficiency. The optimal size of gas turbine was found and it has been proven that the retrofitting coal-fired district heating source with a gas turbine cogeneration unit has technical and economic justification and always leads to the energetic and ecological effects. However, the optimal size of the unit is highly sensitive to electricity and natural gas prices. (C) 2017 Elsevier Ltd. All rights reserved.