Abstract This paper presents complete mass and energy balance of a novel installation for thermal utilization of the sewage sludge. Calculations were performed for the typical output of a wastewater processing plant in a middle size Polish town. Overall, the proposed configuration seems to be advantageous, as the proposed installation is fully sustainable and does not need external energy sources, due to maximized heat recovery from many different sources. Optimization of the heat use is performed, by utilizing all the available heat sources, including low-quality heat, such as the latent heat of water vapors, present in wet air after drying. Despite using plasma gasification system, the installation is able to generate surplus electricity, which can be used as a power source for all of the auxiliary devices, such as fans, augers and PLC systems. The proposed system can be implemented in the water treatment plants, in towns with the total amount of inhabitants ranging from a couple of thousand up to 40 thousand. System does not require anaerobic digestion of the sewage sludge. Nonetheless, the use of anaerobic digestion brings some advantages as the producer gas from the gasification installation can be mixed with biogas.