Abstract: The effectiveness of bagasse as a source of energy is increased by a flexible operation adapted to the power requirements, fuel storage requirements and other variables of a sugar mill operation. Part or all of a primary stream of bagasse from the sugar mill is dried from its initial moisture content, e.g. in the order of 50%, to a lower moisture content, e.g. in the order of 35%, using a portion of the hot flue gases from the boilers which are used to supply power for the sugar mill operation. The resulting drier material is separated to provide an oversize particle stream which may be sent directly to the boiler for burning, to storage in the bagasse house, or to a secondary drying operation, and a secondary stream of fine particle size bagasse components which are most suitable for further process and densification.