Mathematical model, aimed for prediction of processes in TE Kostolac B power plant utility boiler furnace tangentially fired by pulverized lignite, was developed in-house. The model was applied in numerical analysis of boiler operation, in order to reduce NOx emission by combustion modifications in the furnace, while maintaining high efficiency of the boiler unit. Complex two-phase gas-particle flow was modelled using Euler-Lagrange approach. Coupling between phases was done by using PSI-Cell concept. In order to perform necessary analysis, NO formation/destruction sub-model was implemented, within comprehensive combustion code, used to predict emission from the furnace. Thermal and fuel NO were modelled, as the most influential nitrogen oxides during pulverized coal combustion process. The computational code was developed to be easily used by engineering staff dealing with the process analysis in boiler units. Numerical simulations were performed for the boiler fired by the lignite Drmno, under different operating conditions. Contradictory requirements with respect to emission reduction and efficient combustion with safe operation of super-heaters often require boiler to operate within narrow limits of operation parameters, which is determined by means of the boiler thermal calculation.