The paper describes analysis of the effective conversion of biomass for energy in Latvia. The paper describes the present situation of renewable energy resources utilization in Latvia, as well as the possibilities for future development. Analyses of perspective scale of renewable energy utilization was worked out, taking into consideration possible level of efficient use of these resources with promoting innovative technologies and with ecological aspects of the energy sector development. At present firewood as fuel is predominantly used by household in rural area and recently it’s also used at the boiler-houses. Now we have a situation, when it is urgent for our countries to define demand for energy resources that is the situation when there is possibility to affect the consumer and to change motivation of its activities. The energy sector in Latvia offers the potential for considerable changes in terms of the structure of the sector, increasing energy efficiency measures and using renewable energy sources. The increased use of biomass in district heating (and co-generation) looks promising in terms of cost-effectiveness and reduction of GHG emissions. Objective for biomass use development described in the paper including technical, legislative, institutional/organizational, economic, information and financial aspects.