Biomass is considered carbon neutral, and displacement of fossil fuel-based power by biomass-based power is one means to mitigate greenhouse gases. Large forest areas in British Columbia (BC), Canada, are infested by the mountain pine beetle (MPB). Dead wood from the infestation is expected to vastly exceed the ability of the pulp and lumber industry to utilize it; current estimates are that 200–600 million m3 of wood will remain unharvested over the next 20 years. Regions where the damaged wood is not harvested will experience loss of jobs in the forestry sector, increased risk of forest fire hazard, carbon emissions from burned or decaying wood, and uncertainty about timing of replanting since this usually occurs at harvest. This paper reports the results of a detailed preliminary techno-economic analysis of producing power from MPB killed wood. Power plant size and location are critical factors affecting overall power cost. Overall cost of power rises steeply at sizes below 300 MW net power output. By locating the power plant in an area of high infestation, transportation distances can be minimized. A 300 MW power plant would consume 64 million m3 of wood over a 20-year lifetime, and hence is a significant sink for otherwise unharvestable wood. Cost estimates are based on harvesting of whole dead trees with roadside chipping and transport to a central power plant located in either the Nazko or Quesnel regions of BC. A circulating fluidized bed boiler with a conventional steam cycle is a currently available technology demonstrated at 240 MW in Finland. The estimated power cost is $68 to $74 per MWh, which is competitive with other “green power” values in BC. Given recent values of export power in the Pacific Northwest, a 300 MW MPB power plant is viable with a carbon credit below $15 per tons of CO2.