This work is the first part of a wider project aiming at demonstrating the capabilities offered by the thermoeconomic approach to the diagnosis of malfunctions in energy utility systems (TADEUS problem). The final goal is to create a common basis of work for people interested in applying thermoeconomics to identify malfunctions and to evaluate their effects on the overall plant performance. The main issues to be addressed when performing a diagnosis of energy system malfunctions using a thermoeconomic approach are summarized. A combined cycle power plant is proposed to demonstrate the practical feasibility of the thermoeconomic approach. An overview of its operation characteristics, thermodynamic design properties and control strategy is given in Part 1, and a comprehensive model is described for further use as common basis to illustrate the various diagnosis approaches either by the authors or third parties. Possible component malfunctions and main theoretical aspects of the thermoeconomic approach are presented in Part 2. The paper shows at which level of detail the analysis of physical and technical characteristics of the plant should be performed, how to develop a design and off-design model suitable for malfunction analysis, how to analyse and define component malfunctions and how to interpret and use thermoeconomic variables and indexes. (C) 2004 Published by Elsevier Ltd.