A circulating fluidized bed (CFB) boiler has one or more bubbling fluidized bed enclosures containing heating surfaces and located within a lower portion of the CFB boiler to provide a compact, efficient design with a reduced footprint area. The heating surfaces are provided within the bubbling fluidized bed located above a CFB grid and/or in a moving packed bed below the CFB grid inside the lower portion of the CFB boiler. Solids in the bubbling fluidized bed are maintained in a slow bubbling fluidized bed state by separately controlled fluidization gas supplies. Separately controlled fluidization gas is used to control bed level in the bubbling fluidized beds or to control the throughput of solids through the bubbling fluidized beds. Solids ejected from the bubbling fluidized beds can be returned directly into the surrounding CFB environment of the CFB boiler, or purged from the system for disposal or recycle back into the CFB. Solids which are recycled back to the CFB have less heat and can be used to control the temperature of the fast moving bed in the CFB.