Environmental pressures have resulted in an increased importance being placed on the efficient production and consumption of energy. Micro combined heat and power (mu CHP) technology has Lie potential to make an important contribution to make the transition to more sustainable energy systems since it is a highly efficient technology for generating both electricity and heat from a single fuel source. The conventional operation strategies for these technologies are pre-determined and either heat-led or electricity-led. This paper presents an optimal online operation strategy for mu CHP systems, which is more efficient than the aforementioned conventional pre-determined operation strategies. A generic optimal online linear programming (LP) optimiser has been developed for operating a mu CHP system. It is generic since it is applicable for any mu CHP technology or demand profile. This optimiser is capable of minimising the daily operation costs of such a system. Three different simulation scenario; have been investigated: the new feed-in tariff (FIT) scheme; the trade of electricity; the introduction of a carbon tax. In all three investigated scenarios, the results show that the optimiser significantly reduces operation costs when compared to the conventional pre-determined operation strategies. As such, it is suggested that the optimiser has the potential to deliver significant energy savings in practice. (C) 2011 Elsevier B.V. All rights reserved.