Woody biomass has long been used to make heat. Recently, there has been a renewed interest in woodfired energy production because woody biomass is carbon free and it is an abundant energy source in the world. The past 20 years have witnessed an exciting growth in the numbers of wood-fired heating plants, but compared to conventional fossil fuels, its portion in our energy mix is rather insignificant. To promote the use of woody biomass as well as giving a guideline for woody biomass-based energy system, technological and economic feasibility analyses of wood-fired cogeneration facilities and equipment are necessary. The objective of this study is to evaluate the potential of a cogeneration system and to perform reliable economic analysis of an optimal business model. Work should be initiated to establish a multilateral network, taking into consideration institutional infrastructure, scientific capabilities, and cost effectiveness.