A circulating fluidized bed reactor is provided that includes a reaction chamber having a vertical partition wall forming two independent subchambers that include a combustion subchamber and a cooling subchamber. A combustion fluidizing gas is provided to the combustion subchamber to maintain a circulating fluidized bed therein. At least one centrifugal separator receives flue gas from the combustion subchamber and separates particles from the flue gas. At least one external bed receives the particles from the at least one centrifugal separator and provides the particles to the combustion subchamber. An external bed fluidizing gas is provided to the external bed to fluidize the particles therein. The cooling subchamber cools the external bed fluidizing gas received from the external bed. A heat exchanger cage receives the flue gas from the centrifugal separator and the external bed fluidizing gas from the cooling subchamber.