Fossil fuels are getting exhausted very fast and their replenishment is limited. So the search for alternate energy is of prime importance to the world in general and oil deficient developing countries in particular. Biomass based renewable crop residues like cotton stalk is one such option. Cotton stalk can be gasified in a downdraft gasifier. The producer gas from the gasifier can be used for thermal applications or the gas after cleaning in a gas conditioning unit can be used to run a diesel engine-alternator assembly to produce electricity. Diesel replacement of the order of 61% is attainable. The cost of power generation from the cotton stalk in dual fuel mode is less than that in diesel alone mode at all brake loads except at very low load(<20%). The maximum savings occur at 80% of the full load.