This study proposes a game-theoretic approach to model and analyze the process of utilizing biomass for power generation considering three players: distributor, facility developer, and participating farmer. We characterize the Nash equilibrium of the sequential game and discuss its features. A special attention is devoted to the analysis of the impact of incentives and initial target on the equilibrium, in which the biomass is part of electricity production. (C) 2009 Elsevier Ltd. All rights reserved.