Biomass is one of the renewable energy sources being used widely for power generation. This research work includes developing a comprehensive model for a biomass based power generation system as well as analyzing the technical, economical, and environmental impacts. The research objectives include modeling of the system, stability studies, and sensitivity analysis using MATLAB/Simulink. A mathematical model for the gas turbine has been developed and successfully interconnected with the distribution network. Transient stability of the power system has been carried out for four bus and six bus test case systems. Maximum rotor speed deviation, oscillation duration, rotor angle, and mechanical power have been taken as the stability indicators to analyze the system characteristics. Additionally, the sensitivity of the system to the changes of gas turbine parameters has been investigated under balanced and unbalanced fault scenarios. The economical and environmental impacts of the biomass have been analyzed using HOMER software developed by the National Renewable Energy Laboratory (NREL). The net present cost of the four biomass resources namely agricultural resources, forest residues, animal waste, and energy crops were obtained and the comparison of the costs of the biomass fuels as well as the diesel have been carried out. To investigate the environmental impact, carbon emissions of the different biomass fuels have been explored using HOMER.