In this article, diverse liquid biofuels of the first generation were compared as partial or infant substitutes for fossil diesel fuel applied in cogeneration plant of the average capacity of 340 kW. The study concentrates on agricultural and economic conditions as well as legislative basis distinctive to Lithuania. At the laboratory of the Lithuanian University of Agriculture Institute of Agro-Engineering an experimental diesel engine powered generator was fuelled with rapeseed oil methyl ester (pure and in the blend with fossil diesel and dyed diesel fuels) and rapeseed oil with excellent energy balances and emissions characteristics more favorable than fossil diesel. Detailed estimations were proposed in order to assess the economic feasibility of complementing renewable electricity and heat generated in the final output cycle. The carried out analysis showed, that good perspectives are forecasted for using diesel engines in cogeneration plants, if they run on rapeseed oil produced by farmers themselves. The operation of such a plant would realize 184960 of (sic) annual income for sold electricity, allowing to pay annual depreciation expenses and exceed the production cost for thermal energy to be 0.033 (sic)/kW h. This price lies under the established one by the centralized energy suppliers, accordingly 0.058 (sic)/kW h. (C) 2010 Elsevier Ltd. All rights reserved.