A rural area power supply system (RAPSS) which produces charcoal as a by-product for use elsewhere through the gasification of biomass fuels is modelled. The power generation system utilizes a conventionally-fuelled engine-generator combination to produce electricity for local use. The energy needed for the gasification process is obtained from the exhaust gases from an internal combustion (IC) engine, which could be a petrol engine, a diesel engine or a gas engine. In this particular model, a diesel engine-generator system is specifically used. The charcoal production system being modelled is a small-scale system, producing between 20 and 60 kg of charcoal per hour, with the diesel engine running at its rated capacity. The special features and constraints which govern such a system operating in a rural environment of a developing country are addressed, followed by a study of the rate of charcoal production from a given system, using thermodynamic relationships. The key features of such a system include reliability, simplicity of operation, robustness, operation by local personnel and a level of technology appropriate to the location of the system.