Biomass energy is useful in mitigating greenhouse gases as biomass growth captures CO2 from the atmosphere. This captured CO2 is eventually released upon the use of these biomass feedstocks, leading to a short duration carbon cycle. One prominent biomass feedstock is the sugarcane bagasse that is a by-product of sugar mills. Conventionally, the bagasse produced after crushing sugarcane is utilized in mills by directly burning it in the boilers. However, an efficient way of utilizing this biomass fuel would be through gasification. The biomass gasification process produces syngas which can be used as fuel for meeting the heat and power demands of the sugar mill, as well as surplus electricity, which can be supplied to the grid. The present study aims to highlight the efficiency improvement potential of bagasse gasification. The entire sugar mill as well as the bagasse gasification process, have been modeled in the ASPEN Plus® software. Heat integration has been performed to optimize the process flowsheets. The electrical energy generated by combusting bagasse is estimated to be 0.57 kWh/kg of bagasse combusted. In contrast, the gasification process can increase this energy generation up to 1.16 kWh/kg of bagasse at 10 % moisture content (by wt.). This study aims to provide awareness about the cleaner and efficient utilization of the energy that lies dormant in these industrial residues.