Wood fuel has a high energy density, 18.3 MJ/kg dry matter, and it is combustible also in existing oil furnaces (in the range 1-15 MW) with little alteration. In principle, wood powder would be a possible fuel for small scale combustion, and we are in the process of developing such a furnace. During the last few months, we have constructed and tested a feeding mechanism and a combustion chamber that seem very promising. As of November 1994, we have reached 1481 K and been able to keep the temperature around 1400 K for any length of time at the time in one of our two prototype burners. A joint TPV R&D program, in which we cooperate with researchers at National Renewable Energy Laboratory, Golden, CO, USA, is in the planning, aiming at co-generation of electricity and heat from refined wood fuel.