The potential of agricultural residues has been assessed worldwide and at different scales. Interpreting results so as to determine the possible role of this biomass feedstock in energy supplies, requires a clearer understanding of the conditions in which residues can effectively be mobilized for energy production. The experience of India with hundreds of projects where agricultural residues are transformed to heat and power partially sold to the grid, is analyzed and checked against the residue potentials that have been assessed in this country. We find that, in the absence of technological improvements in biomass conversion, the apparent success of Indian bioenergy projects is not sustainable in the long run due to rapid exhaustion effects on residue availability, coupled with the increasing costs that would be difficult to compensate by higher electricity tariffs. We also identify there is a serious agricultural issue which needs to be addressed in regard to degraded soils; this could lead to the reallocation of all primary residues, as well as part of secondary residues to soil and livestock needs. Such perspectives are considered within three contrasted scenario storylines.