The paper discusses development trends of bioenergy production and use in Latvia. A methodology for the assessment of biomass potential was developed and applied to a Latvian case study. Four scenarios were built to analyse the potential of biomass supply for energy needs and energy costs. The biomass resources considered are forestry residues and by-products, energy crops, and agricultural residues. The evaluation is performed on the basis of historical data analysis and literature review applying indicators with sufficient level of information aggregation and adequacy. Future bioenergy development patterns are assessed from technological, ecological and environmental points of view. The analysis focuses on currently initiated cogeneration plant and boiler house projects (planned to be finished in two years’ time) and maximum available bioenergy resources in country. The analysis indicates the biomass potential available for energy needs in the range of 25–30 TWh per year in 2020, of which circa 15 TWh were used in 2011.