In many countries the role of combined heat & power (CHP) generation in the power & heat sector is significant. However, in decomposition analyses of the power & heat sector the contribution of CHP to observed changes in primary energy use or CO₂ emissions is generally not made explicit. In this paper, the contribution of CHP is shown for eight countries (China, Denmark, France, Germany, Italy, the Netherlands, Poland and the USA) in the period 2005–2016. In addition, an alternative method is proposed for power & heat sector decomposition analysis with five driving factors: volume effect, subsector effect, heat effect, fuel mix effect and efficiency effect. This method combines indicators from existing decomposition methods and complements them with a CHP specific heat effect. The proposed method provides improved insight in the factors driving change in primary energy use or CO₂ emissions in the power and heat sector, especially in case changes take place regarding either 1) the power-to-heat ratio, 2) the share of CHP electricity in total electricity production, 3) the CHP fuel mix, and/or 4) the efficiency of individual CHP fuels.