Biomass power generation can not only reduce dependence on coal but also convert agricultural waste into energy and alleviate environmental pollution. In order to address the major challenges such as the sustainability of the straw power generation (SPG) and to provide a scientific basis from environmental and economic perspectives, a sustainability assessment model was established to evaluate the performance of SPG. Life cycle assessment (LCA), life cycle cost (LCC), and the Best-Worst Method (BWM) were integrated into the model. Four SPG scenarios were studied. The results showed that agricultural waste alternative coal-fired power generation had weak economic sustainability, with the ratio of benefit to cost of SPG ranging from 0.8752 to 1.1866. While for the environmental dimension, a strong sustainability was obtained, with the greenhouse gas (GHG) abatement potential of −0.8903 t CO2-eq unit agricultural waste. The findings obtained from the four SPG scenarios suggested that direct combustion SPG had great sustainability potential in China, and several factors such as agricultural waste supply chain model, pollutant treatment technology, transport vehicles, and agricultural waste purchase cost were the main factors which lead to unfavorable economic performance. We suggest that SPG schemes, transport models, and financial subsidies should be carefully designed to improve the sustainability of agricultural waste power generation.