Co-utilization of natural gas and biomass is a successful way to make efficient use of them for chemical production and power generation, for biomass is rich in carbon while natural gas is rich in hydrogen. The present paper therefore proposes a new polygeneration system taking biomass and natural gas as materials for methanol production and power generation. The new polygeneration system can achieve the optimal ratio of H(2) to CO for methanol production by adjusting input ratio of natural gas to biomass without any energy penalty. Thus, the suggested system can eliminate CO to H(2) shift process and CO(2) remove process, which can avoid material and energy destruction; however, those processes are otherwise necessary in individual biomass to methanol plant. Moreover, the new system eliminates the CO(2) addition process: however, the addition of CO(2) is necessary in individual natural gas to methanol plant, which causes extra energy penalty. This system combined chemical production and power generation together, in order to achieve the cascaded utilization of chemical and physical energy of natural gas and biomass. In a further way, we investigated the key processes, to maximize the utilization of energy and improve system performance. A thermo-chemical process taking biomass and natural gas as co-feedstock is compared with the systems that only taking either biomass or natural gas as resource for methanol production and power generation. The evaluation and calculation of the systems are carried out by help of Aspen Plus process simulator. The evaluation results indicate that, the new polygeneration system can reduce materials input at least 9% compared with individual systems with same output. In a further way, the effect of natural gas to biomass feed ratio on system performance is also investigated. The research results show that, the proposed polygeneration system would be expected to realize efficient utilization of biomass and natural gas, and offer a possibility of developing new technologies for biomass and natural gas based systems. (C) 2009 Published by Elsevier Ltd.