To improve preventive maintenance, this study uses a hybrid Petri net modelling method coupled with parameter trend and fault tree analysis to perform early failure detection and isolation. A Petri net arrangement is proposed that facilitates alarm, early failure detection, fault isolation, event count, system state description and automatic shutdown or regulation. These functions are very useful for health monitoring and preventive maintenance of a system. A fault diagnosis system for district heating and cooling facilities is employed as an example to demonstrate the proposed method. © 1998 John Wiley & Sons, Ltd.