This study examined the decentralisation of energy production with possibilities of trading not only electricity but also heat. This was carried out with a limited population of buildings connected to the district heating network in a small town in Finland. The study examined whether a buildings community could be self sufficient with respect to heat by using small CHP plants, and explored the consequences of such an energy system. It also aimed to find an optimal solution. Therefore, it searched in what type of buildings should the micro-CHP plants be installed and with what kind of strategy should they be operated in order for the community to be energetically self sufficient without producing lots of excess heat. (c) 2006 Elsevier Ltd. All rights reserved.