The most efficient way so far to extract energy from renewable sources is combustion of solid fuel. Solid fuel furnaces of moderate capacity (5–10 MW) equipped with reciprocating grates are most popular. Grate combustion is a well-developed technology; however, to burn biofuel in this type of furnaces in the optimal and safe way, the fuel must be of high quality and have at least constant moisture content. However, increasing demand for biofuel results in increasing prices. To remain in the market and to stay competitive, heat producers choose to utilise moist biofuel of lower quality, whose moisture content can vary and reach up to 60% wt. The burning on the grate of such biofuel is complicated as the drying process occupies most of the space in the furnace. The purpose of this work was to analyse processes taking place in a furnace, such as: primary air supply, influence of flue gas recirculation and radiation from hot surfaces of the furnace to biofuel drying. Analysis of the data obtained would provide technical decisions facilitating optimal fuel combustion in a furnace without additional investments. Analysis of biofuel drying was performed in an experimental setup with a fixed fuel bed. The experiments were performed with wood chips and four different drying fluid temperatures. The results of experimental studies have shown that the drying rate of biofuels upper layers is strongly influenced by radiation from hot surfaces and the moisture content of the sample decreases by 18% wt.