A method for preparing high water content fuel for powder fired steam generators uses the gas turbine exhaust gasses directly to dry the fuel as it is being milled. The exhaust gasses are applied at temperatures above 400 deg. C and the milled fuel is blown directly into the burners without intermediate storage and without further processing. The gas turbine exhaust gasses are mixed with fresh air as well as with an inert gas to control the burn rate of the milled fuel. The process can be applied to any type of fuel with a high water content.
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