At present the worldwide energy market is dominated by fossil fuels, despite that it has been demonstrated to be a major source of environmental problems. In Cuba, about 96% of the power generation comes from fossil fuels, and 26% of this is produced by decentralized power stations (DPSs). DPS technology grew by a factor of six from 2005 to 2010, aiming to increase the efficiency in power generation and distribution, and to reduce the vulnerability on climate events. However, environmental impacts related to this technology, especially those impacts on human health, require a detailed analysis, considering that many DPSs have been located nearby densely populated areas. This paper presents an analysis of the external effects related to gaseous emissions from decentralized power generation in Santa Clara City, Cuba. Also a perturbation analysis aiming to reduce such effects is presented. For this purpose a rather novel method called Integrated Assessment of Energy Supply (IAES) was developed. The IAES is built on the Impact Pathway Approach (IPA) and the System Perturbation Analysis (SPA), but including additional developments. The first of these concerns is the implementation of perturbations analysis to evaluate the external effects variation related to modifications in facility characteristics and operating conditions. E.g.: fuel type, efficiency, stacks geometry and microlocalization. Second, the exposure to polluting gases in the study area is determined taking into account the dispersion of pollutants, and the geographical distribution of the population. The exposure modeling is determinant to estimate human health impact. In this way it was found that northwest DPS cause the highest local impact on human health. This is associated with the pollutants concentration increase in densely populated areas. The higher CO2 emissions correspond to the southeast DPS by a factor of 1.8 compared to the northwest DPS. However, the local impact related to the southeast DPS is lower, due to its location where downwind population is lower. A reduction potential on health impact of about 20% and 9% respectively was finally determined for northwest and southwest DPS. (c) 2013 Elsevier Ltd. All rights reserved.