The aim of this paper is to analyse the impact of different natural gas and electricity end-use technologies in the residential sector, which compete among themselves in terms of energy consumption and carbon emissions. The analysis of 17 different technology options, which were chosen in order to match the consumption behaviour of a typical Portuguese family, has shown that the use of electric heat pumps, both for space and water-heating, combined with the use of a natural gas cooker, leads to the lowest energy consumption and to the lowest environmental impacts in terms of carbon emissions. Considering only the running costs, this choice is 45% more economic than having a natural gas centralised heating system combined with a gas cooker, and is 60% more economic than having an electric resistance space heater combined with an electric storage water heater and electric cooker, which is the worst case. The life cycle cost (LCC) analysis shows that the economic optimum is reached by the combination of a natural gas water heater with an electric storage space heater, and a natural gas cooker. The cost of conserved carbon (CCC) analysis shows that the combination of an electric heat pump water heater with an electric storage space heater, and a natural gas cooker is the best option in terms of environmental performance. (C) 2003 Elsevier B.V. All rights reserved.