Republic of Serbia consumes about 15 million tons of equivalent oil per year (Mtoe). At the same time potential of the renewable energy sources is about 3,5 Mtoe/year. Main renewable source is biomass, with its potential of about 2,6 Mtoe/year, and 60% of the total biomass source is of agricultural origin. Mainly, that type of biomass is collected, transported and stored in form of bales. At the same time in one of the largest agricultural companies in Serbia (PKB) there are over 2000 ha of soya plantations, and also 4000 t/year of baled soya straw available, none of which being used for energy purposes. Therefore, efforts have been made in the Laboratory for Thermal Engineering and Energy of the "Vinča" Institute to develop a technology for utilizing bales of various sizes and shapes for energy production. Satisfactory test results of the 1 MW experimental facility - low CO levels and stable thermal output - led to the building-up of a 1.5 MW soya straw bales-fired hot water boiler, with cigarette type of combustion, for the purposes of greenhouse and office heating in the PKB. Further more, achieving good results in exploitation of that hot water boiler, the next step is building up the first combined heat and power (electricity) production facility (CHP), which will use agricultural biomass as a fuel, in Serbia.