In this paper, the economical and energy saving advantages of the distributed energy system, which consists of a micro gas turbine-solid oxide fuel cell hybrid power generation system, waste heat recovery devices and air-conditioning equipments, are investigated. Firstly, the thermodynamical performance evaluation of the hybrid system with the heat recovery devices is discussed to estimate the energy conversion efficiency of the whole system. Secondly, by using 1inear programming technique, the optimum operation planning of the cogeneration plant based on the hybrid system is discussed to predict the reduction of the primary fuel consumption and utility cost. Throughout detailed investigation, it is found that the energy conversion efficiency, which includes the waste heat utilization, reaches over 80% (LHV). In addition, the optimum operation of the hybrid system, of which power generation capacity is appropriate for the energy demand, achieve the highly effective energy saving against the traditional energy supply scheme, that is, the fuel reduction reaches around 40% to the conventional value.