AbstractThe integrated energy service system for a specific area is supposed to deliver electric and thermal energy in an integrated manner for the purpose of reducing cost, primary energy consumption, and CO2 emission. Under an assumption of the service system, this paper develops a multi‐objective optimization model for determining urban energy systems. Considering the various energy system alternatives, such as photovoltaic generations for residential houses and fuel‐cell cogenerations for business and commercial customers, the model determines the share of the energy system alternatives in order to minimize the above three indices. As numerical examples, this paper illustrates trade‐off analyses in the case when the proposed model is applied to a 2 km × 2 km square area in Osaka. Finally, this paper illustrates the role of various energy system alternatives from CO2 reduction and fossil energy reduction points of view. © 2004 Wiley Periodicals, Inc. Electr Eng Jpn, 147(3): 20–31, 2004; Published online in Wiley InterScience (www.interscience.wiley.com). DOI 10.1002/eej.10275