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Microgrids—generating systems incorporating multiple distributed generator sets linked together to provide local electricity and heat—are one possible alterative to the existing centralized energy system. Potential advantages of microgrids include flexibility in fuel supply options, the ability to limit emissions of greenhouse gases, and energy efficiency improvements through combined heat and power (CHP) applications. As a case study in microgrid performance, this analysis uses a life cycle assessment approach to evaluate the energy and emissions performance of the NextEnergy microgrid Power Pavilion in Detroit, Michigan and a reference conventional system. The microgrid includes generator sets fueled by solar energy, hydrogen, and natural gas. Hydrogen fuel is sourced from both a natural gas steam reforming operation and as a by-product of a chlorine production operation. The chlorine plant receives electricity exclusively from a hydropower generating station. Results indicate that the use of this microgrid offers a total energy reduction potential of up to 38%, while reductions in non-renewable energy use could reach 51%. Similarly, emissions of CO2, a key global warming gas, can be reduced by as much as 60% relative to conventional heat and power systems. Hydrogen fuels are shown to provide a net energy and emissions benefit relative to natural gas only when sourced primarily from the chlorine plant. Copyright © 2006 John Wiley & Sons, Ltd. [ABSTRACT FROM AUTHOR]