The system includes a circulating fluidized bed combustor coupled at its outlet to a separator. A vertical return channel is provided for conveying separated solid particles from the separator back to the combustion chamber. A gas turbine cycle is provided, including a gas compressor, a heat transfer means directed to a first duct to the compressor for heating the compressed oxidizing gas, a gas turbine connected through a second duct to the heat transfer means for power generation and a third duct for conveying expanded oxidizing gas from the turbine to the combustion chamber. The heat transfer means includes tubes disposed inside the vertical return channel for indirect heat transfer between the compressed gas and the dense suspension of separated particles flowing downwardly in the vertical channel.