Foreseeing a promising future of utilizing bio-energy, more and more small-scale biomass power plants are recently built. Biomasses with high moisture content such as sludge or Empty Fruit Bunch are often used as fuel in small-scale power plant without proper drying. These highly moist biomasses reduce the efficiency of the boiler but on the other hand drying the biofuel is also an energy intensive process. This paper aims to investigate how drying would affect the overall energy efficiency while proper heat integration in between the drying and power plant is under consideration. A 12.5 MW biomass power plant that burns EFB with 60 wt% moisture is used as a base case. Two types of dryer, Hot Air Dryer (HAD) and Superheated Steam Dryer (SSD), are proposed for the drying process. These two dryers require heat at different temperature levels to provide a better chance for heat integration. Material and energy balance models of the dryers and boilers are derived in this paper and the steam power plant model is constructed in Aspen Plus. The results of this study show that with proper drying and heat integration, the overall efficiency can be improved by more than 5%, when compared to process without drying. (C) 2013 Elsevier Ltd. All rights reserved.