Bagasse is the fibrous residue left after sugarcane is crushed to extract its juice. Though less benefits of bagasse have been reaped, they have enough potential as fuel for cogeneration plants and raw materials for insulation board, straw board, partical board, furniture, rough paper, bag paper high alfa cellose pulps, grease proof paper, pules and newsprint paper etc. TNPL, one of the largest newsprint plant in India uses bagasse as raw material.

Over 4000 MW electricity can generated across India using bagasses as fuel. It can substantially supplement the deficient power situation. So far, energy generated by cogeneration plants are used for captive consumption. Use of bagasse in power generation reduces depletion caused to environment by the use of conventional energy like petrolium, coal, etc. It will also help conservation of ecological balances.

Co-generated power apart from being a renewable source of energy is also eco-friendly. The Government of India has a vision plan to increase the share of renewable energy in the total electricity production to 10% by the year 2010.