With over one hundred years of commercial cultivation, sugar cane is one of the most valuable agricultural botanical resources in the World. This position is not only based on production of sugar from sugar cane but also it is, to a great extent, as a result of the increasing importance of sugar cane by-products and side industries. Furthermore, with the advancement of science; awareness of inharmonious growth of materials and energy consumption, and the desire to minimize the negative impacts of industrial pollutants and materials, the scope for using sugar cane is still developing rapidly. \ud Bagasse, molasses and filtered mud are the most important by-products in the process of production of sugar from sugar cane. Among these by-products, bagasse is both a biomass resource for producing energy and is one of the most important agricultural wastes, which can be used in different side industries. Therefore, it was chosen for study in this research as it offers considerable potential as a source of energy. \ud Bagasse is often used as a primary fuel source for sugar mills; when burned in quantity, it produces sufficient heat energy to supply all the needs of a typical sugar mill, with energy to spare. To this end, today a secondary use for this waste product is in combined heat and power plants where its use as a fuel source provides both heat and power. With a suitable energy production technology, bagasse can be used as a fuel in CHP for high efficiency energy generation. Today, with regard to the low efficiency of traditional methods, the high cost of disposal of waste materials and environmental pollution, the use of modern methods such as anaerobic digestion for the production of biogas has increased. The collected biogas from the process of anaerobic digestion provides a renewable energy source similar to natural gas, but with less methane and lower heating value, that is suitable for use in CHP plants. \ud In this research, a comparison with different bagasse energy production technologies leads to the selection of anaerobic digestion as the most suitable for use in Iran. Then a typical biogas CHP is assumed, and the biogas system is designed. Finally, the potential for the development of biogas CHP plants with bagasse in Iran is addressed through a study of the economic and environmental aspects
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