A continued thrust towards wider use of renewable energy devices at domestic, commercial and industrial levels not only resulted in greater awareness but also significant installed capacities. The energy requirement in India is steadily increasing and this requirement is met both by commercial and renewable energy sources. India being a tropical country, renewable energy is seen as an effective option for ensuring access to modern energy services. So the objective of the present study is to evaluate the socio economic and environmental impact of the Biomass Gasification based Power Plant (BGBPP) in Chottomollakhali islands of Sunderbans set up by West Bengal Renewable Energy Development Authority (WBREDA). Four villages of Chottomollakhali Island are benefited with electricity from the power plant, which serves 225 consumers comprising household, commercial and industrial sectors. A simple cost benefit analysis has been used to estimate the impact of BGBPP. The findings of the study indicate that BGBPP has made a very positive impact on the life of the villagers of Chottomollakhali Island. This has led to increased economic activities and more profitable turnover for the commercial consumers and improves quality of life for the household sector. All of them have showed willingness to pay a higher price to get 24 h of power supply. From the cost benefit analysis it has been found that the benefit cost ratio, internal rate of return and pay back period of the project are 1.68, 19% and 7 years, respectively. But environmental awareness is very poor among the villagers. (C) 2003 Elsevier Ltd. All rights reserved.