The restructuring of the electricity industry, environmental concerns, and the expansion of small-scale production units have increased the use of Distributed Generation (DG) technologies. This study presents a novel biomass-to-power smart supply chain network that integrates biomass logistics, electricity generation, and DG operations under a buyback contract framework. Biomass is supplied to a central power plant for electricity generation, where ash is produced and sold as a by-product. DG units can either buy electricity from the plant or sell their surplus power back to it. The problem is formulated as a Mixed-Integer Linear Programming (MILP) model and solved using GAMS software to maximize the total network profit while considering capacity, emission, and transmission constraints. The novelty of this work lies in developing a comprehensive multi-period optimization model that, for the first time, links biomass-based electricity production with DGs operating under cooperative buyback contracts, incorporating carbon cost accounting and ash valorization. Results show an optimal total profit of 15,037.75 units, with DG units dynamically trading electricity to enhance overall system efficiency and profitability. These findings indicate that cooperative DG-plant operations, efficient biomass conversion, and optimal buyback pricing are key to maximizing profitability and ensuring sustainable smart grid operation. The proposed framework offers valuable insights for integrated renewable energy network planning.