A repowering analysis of a conventional, coal-fired industrial combined heat and power (CHP) plant by means of a gas turbine (GT) and heat recovery boiler (HRB) has been taken into consideration. The existing system, operating in one of the Polish chemical factories consists of coal-fired boilers, back-pressure extraction turbines, condensing turbines and steam-fed district heat exchangers. Two variants of modernization have been proposed and examined from the thermodynamic, environmental protection and economical points of view. The first one includes HRB for preheating the boiler feed water, condensate, and district Water. while the steam turbine (ST) system and coal boilers work without any structural changes. The other advanced variant introduces live steam superheaters to HRB. The coal-fired boilers, in this light. supply only saturated steam (which is introduced into HRB), so they have to be readjusted by replacing the existing superheaters with convective vaporizers for proper flue gas cooling. Such a scheme ensures a considerable reduction of exergy losses in HRB and therefore leads to deeper flue gas cooling and a decrease of coal consumption for the assumed process steam and district heat demands. Heat and process steam demand duration curves for a typical year of operation of the plant have been adapted as input data. The mathematical model of the whole CHP plant has been built on GateCycle and Visual Basic software. The model includes design and off design analyses of boilers, steam and gas turbines and also takes into account shut-down necessities, concerning machines during their operation outside the acceptable area of their key parameters (e.g. the minimum steam flow in the condensing section of the turbines from the point of view of rotor cooling). The computation was run many times for different sets of input data, read from the demand duration curves. Finally, the yearly values of solid and gaseous fuel consumption, as well as electricity production have been calculated. Both proposed variants of the repowered CHP system have been compared with the existing plant by means of the incremental cumulative economy of chemical energy and pollutant emission. An approximate classical economy analysis net present value (NPV), discounted pay back (DPB) has also been carried out. The whole computation has been replayed for several market GT models. The results obtained lead to the conclusion that repowering of a coal-fired plant by means of a GT and HRB is a very effective way to improve the thermodynamic and environmental protection aspects of power and heat generation. The introduction of the live steam superheater into HRB provides additional advantages in these fields. The economic results indicate DPBs from 3 to 11 years, depending on the situation at the electricity and fuel markets. Copyright (C) 2004 John Wiley Sons, Ltd.