This study presents the life cycle assessment of electricity generation from straw bales and pellets. Straw is the most abundant biomass residue in Europe and its use for energy purposes is promoted on the premise of high greenhouse gas savings. This assumption has delayed the study of sustainability of straw-fired systems on a broader sense and the literature on the topic is almost absent. This study uses data from specific literature and emissions inventories to model a number of straw pathways. The plant modeled is a medium-scale straw-fired power plant of 50 MWth capacity. The results show that electricity from straw-fired power plants can indeed realize high greenhouse gas savings compared both with existing coal plants and with the European electricity mix. The savings are in the range 70–94%. The influence of the geographical origin of straw is analyzed by using datasets for the cultivation of wheat in five different European countries. The highest emissions are recorded for the case of straw from Spain due to the small yields, whereas cultivation processes in United Kingdom and the Netherlands show high environmental impacts due to the high level of fertilization. Other environmental impacts are evaluated, such as acidification potential, eutrophication, particulate matter emissions, and photochemical ozone formation. The bioenergy system scores worse than the current European electricity mix for all the categories. However, it is important to notice that in Spain and United Kingdom the straw system shows lower impacts compared with the local average coal electricity. Finally, the study investigates the ‘break-even’ distance at which the higher emissions from the pellets production are paid off by the saved emissions in their transport compared with the bales. The results show that no reasonable break-even distance exists for road transport, whereas advantages for pellets are evident in any configuration for transoceanic transport.