A novel systematic approach to the evaluation of energy conversion processes and systems, based on an extended representation of their exergy flow diagram is presented and discussed in this article. The method constitutes a substantial generalisation of Szargut's cumulative exergy consumption procedure, and provides a coherent and consistent framework for including non-energetic quantities like capital, labour and environmental impact into an engineering optimisation procedure (the apposition 'extended' refers to these enhanced capabilities). It is argued that some of the issues that are difficult to address with a purely monetary or even with a thermo-economic approach can be resolved in a straightforward manner by extended exergy accounting ('EEA' in this article). As an indication of the potential of the method, a general, qualitative example is offered of the application of EEA to the evaluation of a technical alternative between a non-integrated waste recycling and an integrated waste recycling and incineration facility. (C) 2003 Elsevier Ltd. All rights reserved.A novel systematic approach to the evaluation of energy conversion processes and systems, based on an extended representation of their exergy flow diagram is presented and discussed in this article. The method constitutes a substantial generalisation of Szargut's cumulative exergy consumption procedure, and provides a coherent and consistent framework for including non-energetic quantities like capital, labour and environmental impact into an engineering optimisation procedure (the apposition 'extended' refers to these enhanced capabilities). It is argued that some of the issues that are difficult to address with a purely monetary or even with a thermo-economic approach can be resolved in a straightforward manner by extended exergy accounting ('EEA' in this article). As an indication of the potential of the method, a general, qualitative example is offered of the application of EEA to the evaluation of a technical alternative between a non-integrated waste recycling and an integrated waste recycling and incineration facility. (C) 2003 Elsevier Ltd. All rights reserved.