Biomass is deemed to be the main source of renewable energy in Serbia. Over the past couple of years, considerable efforts have been made to develop a technology which would enable biomass bales of various sizes and shapes to be used for energy production. A hot water boiler with cigarette type of combustion was constructed and used in the experimental investigation of biomass combustion phenomena. During the experiments performed, numerous parameters were measured: flue gas temperature, water temperature at the boiler inlet and outlet, while O-2, CO2, CO, SO2, and NOx content in the flue gas was measured at the boiler outlet. Experiments were performed with biomass feed rate of 0.12 kg/s, mean boiler output of 1.56 MW and mean excess air coefficient of 2.1. During the steady state boiler operation, exhaust gas temperature was measured to be around 150-160 degrees C and obtained CO and NOx emission rates were found to be quite acceptable. In addition, combustion of biomass bales in cigar burners was modelled by the means of appropriate numerical simulation. A good agreement between experimental and numerical results was obtained. (C) 2013 Elsevier Ltd. All rights reserved.