Bioenergy is the renewable and sustainable source of energy produced from organic matter. The challenge of depleting non-renewable resources can be addressed by exploiting the capability of biotic systems to produce bioenergy.The study talks about switching from first generation biofuels produced from sugars and seed oils to fourth generation biofuel that involves metabolically engineered plants. Recent developments in molecular biology techniques have provided valuable tools that could effectively optimize and control the processes involved in bioenergy production in the near future. Production of biofuels employing fungi that have high potential for bioconversion of  lignocellulosic materials abundant in nature can also be an effective means. Synthesis of nanostructures using fungi that can serve as super capacitors would be a solution to the problem of storage of bioenergy. The paper also discusses the role of bacteria in Microbial Fuel Cell (MFC). General biochemistry involved in MFC is also presented. Possible limitations or shortcomings are also identified and importance of identifying newer approaches is stressed upon in order to match the future demands.