Considering the growing interest in Power-to-Fuel, i.e., production of H2 using electrolysis to store excess renewable electricity, combustion-based technologies still have a role to play in the future of power generation. Especially in a decentralized production with small-scale cogeneration, micro-Gas Turbines (mGTs) offer great advantages related to their high adaptability and flexibility, in terms of operation and fuel. Hydrogen (or hydrogen enriched methane) combustion is well-known to lead to flame and combustion instabilities. The high temperatures and reaction rates reached in the combustor can potentially lead to flashback. In the past, combustion air humidification (i.e., water addition) has proven effective to reduce temperatures and reaction rates, leading to significant NOx emission reductions. Therefore, combustion air humidification can open a path to stabilize hydrogen combustion in a classical mGT combustor. However accurate data assessing the impact of humidification on the combustion is still missing for real mGT combustor geometries and operating conditions. In this framework, this paper presents a comparison between pure methane and hydrogen enriched methane/air combustions, with and without combustion air humidification, in a typical mGT combustion chamber (Turbec T100) using Large Eddy Simulations (LES) analysis. In a first step, the necessary minimal water dilution, to reach stable and low emissions combustion with hydrogen, was assessed using a one-dimensional (1D) approach. The one-dimensional unstretched laminar flame is computed for both pure methane (reference case) and hydrogen enriched methane/air combustion cases. The results of this comparison show that, for the hydrogen enriched combustion, the same level of flame speed as in the reference case can be reached by adding 10% (in mass fraction) of water. In a second step, the feasibility and flexibility of humidified hydrogen enriched methane/air combustion in an industrial mGT combustor have been demonstrated by performing high fidelity LES on a 3D geometry. Results show that steam dilution helped to lower the reactivity of hydrogen, and thus prevents flashback, enabling the use of hydrogen blends in the mGT at similar CO levels, compared to the reference case. These results will help to design future combustor toward more stability.