Combined Heat and Power (CHP) plants fired by forest wood can significantly contribute toattaining the target of increasing the share of renewable energy production. However, the spatialdistribution of biomass supply and of heat demand limit the potentials of CHP production. Thispaper assesses CHP potentials using a mixed integer programming model that optimizes locationsof bioenergy plants. Investment costs of district heating infrastructure are modeled as a functionof heat demand densities, which can differ substantially. Gasification of biomass in a combinedcycle process is assumed as production technology. Some model parameters have a broad rangeaccording to a literature review. Monte-Carlo simulations have therefore been performed toaccount for model parameter uncertainty in our analysis. The model is applied to assess CHPpotentials in Austria. Optimal locations of plants are clustered around big cities in the East of the country. At current power prices, biomass based CHP production allows producing around 3% ofthe total energy demand in Austria. Yet, the heat utilization decreases when CHP productionincreases due to limited heat demand that is suitable for district heating. Production potentials aremost sensitive to power prices, biomass costs and biomass availability.