Paper presents parametric evaluation of a modified design of a conceptual micro-combined heat and power unit (micro-CHP) with solid oxide fuel cells. The system incorporates oxygen transport membranes to supply high purity oxygen for post-combustion of lean fuel leaving the SOFC stack. The concentrations of CO2 in the flue gases leaving the system, approaches 99% (on dry gas basis). High temperature oxygen transport membranes, made of perovskite materials, enable oxygen permeation rate exceeding 6 Nml/(cm(2) min). The oxygen permeation is strongly related to the ratio of oxygen partial pressures at the retentate and permeate sides. Results of a parametric evaluation of the system, including the analysis of effects of membrane characteristics on the electrical efficiency, are presented and discussed. Oxygen transport membranes require high pressure at the feed site, therefore an increase of auxiliary power consumption should be expected to achieve high oxygen flow through the membrane. Electrical penalty in range 6-12%-point was observed, in comparison with a conventional micro-CHP system without oxy-combustion. These numbers are often quoted for large power systems operating in a CCS-ready mode with state-of-the-art oxygen separation methods such as pressure swing adsorption (PSA). Electrical efficiency of the system discussed in this paper was evaluated and effects of oxygen permeation rate on the electrical efficiency were analyzed. Copyright (C) 2015, The Authors. Published by Elsevier Ltd on behalf of Hydrogen Energy Publications, LLC.