In recent years, renewable energy sources have played an increasingly important role in potential energy production. The integration of renewables into energy production plants has therefore become a major challenge for many organizations. This study concerns the modernization of a small power plant in a large hospital. The design criteria include the possibility of utilizing renewable energy sources and providing a potential increase in heat production (with additional heat being supplied to a nearby university campus). The existing boiler conditions (i.e. controls, efficiency, etc.) are unable to satisfy the desired requirements and therefore require an extensive retrofit. The purpose of this study was to create an effective methodology for the development of an optimal solution to an integrated renewable energy retrofit. This retrofit would supply the current requirements for steam and in addition provide heat to a newly built local facility. Various alternatives were assessed as part of this study including: a retrofit without a complete concept change; a combined heat and power system using natural gas and making use of alternative cogeneration devices; a system utilizing biomass without the production of electricity; and a system producing energy from biomass with combined heat and power. All alternatives were required to maximize the utilization of existing equipment. In considering the combined heat and power production alternative, the plant would be required to reduce the consumption of imported electrical energy in the original building. After considering the technical and economic factors of the various design solutions obtained, and taking into account additional criteria such as the global trend of the price of crude oil and natural gas, electricity costs, and the political support for electric production from renewable sources, the two best alternatives were determined. The preferred design utilizes an energy production plant with a biomass boiler. An alternative choice includes the use of a combined heat and power energy plant that utilizes biomass as a fuel combined with a backpressure steam turbine for extraction. (C) 2005 Elsevier Ltd. All rights reserved.