Commercial simulator Aspen Plus was used to simulate the conventional processes of the autonomous distillery producing ethanol and the joint production of sugar and ethanol. Changes in conventional processes were evaluated to increase electricity and second generation ethanol production using bagasse fine fraction composed by parenchyma cells (P-fraction). The evaluated processes were thermal and water integrated. The results indicated that the integration of the second generation process to the conventional processes was possible after thermal and water integration. The economic analysis showed that the second generation process integrated to the joint production presented lower payback time, 2.3 years, in comparison with this process integrated to the autonomous distillery, 4.7 years. Due to the high enzyme costs, the cases without second generation ethanol production presented higher economic viability. Product diversification, as sugar and ethanol production in the same site, lowered the impact of enzymes cost on the payback time of second generation process, showing that the integration of the second generation ethanol production process to the conventional sugar production process could be a step to cellulosic ethanol production feasibility in sugarcane mills. (C) 2013 The Institution of Chemical Engineers. Published by Elsevier B.V. All rights reserved.