Biomass gasification is expected to be an attractive option among other competitive applications of biomass conversion for bio-energy. This study analyzes economic feasibility of biomass gasification power generating plants in three selected communities (Ignace, Nipigon and Kenora) of northwestern Ontario. The major variables considered in the model are harvesting and handling costs, logistic costs for biomass feedstock delivery and storage, capital costs of power plant by scales, operation and maintenance costs, labor costs, capital financing costs and other regulatory costs. GIS analysis was undertaken to estimate the distance class matrix to apportion the biomass feedstock supply side from different forest management units. Total cost per MW h power production at a 50 MW scale ranges from CAD 61.89 to CAD 63.79. Total cost per unit of electricity production decreases significantly as plant capacity increases due to economy of scale in the production system. Further, the locations of plants explained the cost variability. (C) 2012 Elsevier Ltd. All rights reserved.