Punjab state has huge potential of conversion of biomass to energy that can produce estimated3172 MW power which is the highest among all the states in India. All the developing countriesare struggling with increasing energy demand and the environmental pollution. The renewable andsustainable energy resources are the best substitute to the conventional fuels and the energy sources.India is the third largest energy consumer and the third largest greenhouse gas emitting country. Inthe case of the state of Punjab, which is one of the top producers of biomass in the country, the shareof renewable energies is still dwarfish in spite of significant opportunities. Conversion of biogas toelectricityisthestandardtechnologyandpowergenerationisthemainpurposeofbiogasplantsinthedeveloped countries but in India it is still used as bio-CNG. Here we aim at analyzing the developmentand the scope of conversion of biogas to electricity in the state of Punjab in India. Massive amountof decentralized biomass resources is available in the state and there is huge potential to use thistechnology due to availability of biomass from the animal waste, the agriculture and the households.This study also focuses on the economic evaluation of a large-scale biogas plant in context of Indiangovernment framework for development to the projects along with the current scenario of renewableenergy resources and the power production by the large-scale Biogas power plants. Our findings showthat the biogas production provides an attractive investment opportunity in the state, especially forthe large-scale farms and the decentralized animal waste. Power generation to cope up the needsof Punjab can be more practicable and an environment friendly by biogas power plants as there isabundance of an organic waste material, an appropriate infrastructure and the suitable climate.