Abstract A thermo-economic analysis of a combined heat and power (CHP) plant fed by syngas produced through the gasification of dry olive pomace is presented. The plant is composed by a 800 kWt downdraft gasifier, a gas clean-up system, a 200 kWe microturbine (MGT) and a heat recovery system to cogenerate hot water. Surplus heat is used to dry olive pomace from 50% to 17% wb moisture content. The plant is modeled in ASPEN Plus. Real data from experimental tests are used to calibrate the gasifier model, while the technical specification and performance of the CHP plant are collected from commercial plants in operation and data from manufacturers. Mass and energy balances are reported throughout the paper. The thermodynamic simulation of the biomass gasifier coupled to the MGT, the thermal and electrical conversion efficiency and temperature of cogenerated heat available are also presented. A thermo-economic assessment is then proposed, to investigate the economic profitability of this small scale CHP plant in the Italian energy policy scenario and considering the subsidies available for renewable electricity in the form of feed-in tariffs. For this purpose, the case study of base load CHP plant operation and heat supplied to different typologies of energy end user is assumed. The results allow quantifying the most influencing economic and technical factors that affect the performance and profitability of such investment and the bottlenecks that should be faced to facilitate a broader implementation of such CHP schemes for on site generation.