The present paper simulates and dynamically analyzes a combined heat and power (CHP) system driven by a gas-fueled internal combustion engine. The CHP system uses a heat exchanger to convert the heat loss of the engine to meet heat demand and uses a generator for power generation. Then, the impact of the use or non-use thermal energy storage (TES) is examined on power and heat generation. Given the different demands of different seasons, two smart control strategies are developed concerning time to attain higher efficiency in different seasons. A TES is included in the control strategy for cold and hot seasons, and analyses are performed for a typical week. The gas engine of the CHP system uses time and temperature variables simultaneously to operate smartly by two strategies for a year instead of one single strategy. The results show that when a control strategy with variable partial loads based on temperature and time is employed, the efficiency of the CHP system’s gas engine is improved. Using the results of the new and smart control strategy, the CHP system exhibits an efficiency of 84.2% in the hot season and an efficiency of 87.0% in the cold seasons for a typical week.