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The high reliability and simple design of microturbines make them an attractive prime mover in the generation and distribution of electricity in the low capacity range. This paper gives an overview of microturbines in the Brazilian environment and provides a performance assessment and an economic analysis of these machines fuelled by natural gas and diesel and also an indication of their emission levels. This work was based on data that were obtained from experimental tests on microturbines operating at full and part load. The performance assessment indicated that it is possible to obtain up to 27 per cent microturbine efficiency at full load under local conditions. The nitrogen oxides (NO x ) and carbon monoxide (CO) emissions level of the machines tested are less than 7 ppmv@15%O 2 at full load when natural gas is the fuel. The units are therefore clean enough to be sited among residential and commercial establishments. The results of the economic analysis show that with the natural gas microturbine used in cogeneration, it is possible to achieve a payback time on capital equipment of less than 4 years. The return on the investment has improved with the favourable pricing policies of some of the natural gas distribution companies and with the rise in electricity prices in Brazil.