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Fossil fuels comprise 93% of Malaysia's electricity generation and account for 36% of the country's 2010 Greenhouse Gas (GHG) emissions. The government has targeted the installation of 330 MW of biomass electricity generation capacity by 2015 to avoid 1.3 Mt of CO2 emissions annually and offset some emissions due to increased coal use. One biomass option is to co-fire with coal, which can result in reduced GHG emissions, coal use, and costs of electricity. A linear optimization cost model was developed using seven types of biomass residues for Peninsular Malaysia. Results suggest that about 12 Mt/year of residues are available annually, of which oil-palm residues contribute 77%, and rice and logging residues comprise 17%. While minimizing the cost of biomass and biomass residue transport, co-firing at four existing coal plants in Peninsular Malaysia could meet the 330 MW biomass electricity target and reduce costs by about $24 million per year compared to coal use alone and reduces GHG emissions by 1.9 Mt of CO2. Maximizing emissions reduction for biomass co-firing results in 17 Mt of CO2 reductions at a cost of $23/t of CO2 reduced. [ABSTRACT FROM AUTHOR]