Energy demand is fast increasing with rapid industrialization and urbanization in India. In a developing economy like India, generally energy demand is increasing at much faster pace than supply. Increasing demand also leads to increase in cost of energy, hence high power tariffs for consumers. Increasing price of petroleum crude and other fossil fuels, world over and in India in the last two decades, has forced us to look for cheaper, renewable sources of energy. Use of bio-mass generated from Agriculture and Agro-process industries are the prime and readily available sources of renewable energy. Cogeneration based on Rankine Cycle is not new to the sugar industry. The term power generation in the engineering sense implies the production of mechanical or electrical power from some other source of energy e.g., thermal hydroelectric or electrochemical energy. India is the second largest producer of Sugar cane in world after Brazil. Indian Sugar mills both in the private and co-operative or joint sector have accepted the importance of implementing high efficiency grid connected cogeneration power plant for generating exportable surplus. In fact, additional revenue stream by sale of exportable power to State Electricity Boards (or third party customers), has become the only way for achieving long term sustainability, given the fiercely competitive domestic and international sugar markets. Sugarcane Bagasse is an ideal renewable source of energy and is readily available from Sugar mills. Conventional means of power generation have used air, steam or water as a working medium for internal combustion engines reciprocating steam engines and steam and hydraulic turbines. Newer techniques such as magnetohydrodyamics, fuel-cell wind and solar power are under investigation and may eventually prove important. Per capita power consumption is a barometer of country's prosperity, economic growth and industrialization. Major portion of the additional power requirement will have to be met through thermal generation. Co-generation power plant (Power Plant) based on bagasse makes use of generation of power from bagasse as fuel. Cogeneration is the simultaneous production of process heat and electric power using single fuel. Biomass fuel can also be used in cogeneration plants for enhancing their efficiency. Biomass combustion facilities that produce electricity from steam-driven-turbine generators have a conversion efficiency of nearly 17 to 25 percent. Using a boiler to produce both heat and electricity (cogeneration) improves over all system efficiency to as much as 85 percent. That is, cogeneration converts 85 percent of the fuel’s potential energy into useful energy in two forms; electricity and steam heat. Cogeneration facilities increase economic viability and profitability of an industry. Cogeneration projects based on agro waste, like rice husk, bagasse etc. as fuel result is lowering the cost of energy generation, low capital investment, higher profitability of plant due to substantial reduction in cost of production and enhanced productivity and less consumption of costly and scarce fuels like diesel oil. The installed power generation of the country stood at 167,077.36MW during FY2010-2011. The Indian government has set ambitious goals in the 11th plan for power sector owing to which the power sector is poised for significant expansion. In order to provide availability of over 1000 units of per capita electricity by year 2012, it is estimated that, need-based capacity addition of more than 100,000 MW would be required. This has resulted in massive addition plans being proposed in the sub-sectors of Generation, Transmission and Distribution leaving ample space for new players. There is a very good scope in the power sector and new entrepreneurs should venture into this field.