In recent years, a growing interest has been observed in the application of methanol as an. alternative liquid fuel, which can be used directly for powering Otto engines or fuel cells achieving high thermodynamic efficiencies and relatively low environmental impacts. Biomass and coal can be considered as a potential fuel for gasification and further syn-gas production and methanol synthesis. In the near future, the economy of methanol production through coal and biomass gasifications can be achieved by their linking with modern gas-steam power systems. The essence of linking is the full utilisation of the capacity of coal/biomass gasification installations. The up-to-date experience of coal and biomass gasification, including gas processing towards syn-gas and methanol production, is described and discussed. A conceptual flow diagram of pressurized and oxygen feeded co-gasification of biomass and coal integrated with combined cycle and parallel methanol production is evaluated. The effect of methanol production rate on the economy of power production is assessed. (C) 2003 Elsevier Science Ltd. All rights reserved.