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Bioenergy with CO₂ capture and storage (BECCS) is a promising negative emission technology (NET). When using sustainably produced biomass as fuel, BECCS allows the production of power and heat with negative CO₂ emissions. The main technical challenges hindering the deployment of BECCS technologies include energy penalties associated with the capture process. This work evaluates the performance of an advanced CO₂ capture technology, chemical looping with oxygen uncoupling (CLOU), in conjunction with biomass-fired combined heat and power (CHP) generation. Results from a MATLAB/Simulink reactor model were incorporated in a plant and integration model developed in a commercial process simulation software to quantify the key performance indicators of the CLOU-integrated CHP plant. Both energy and exergy analysis were conducted. The results show a remarkably low efficiency penalty of 0.7% compared to a conventional reference plant, and a high carbon capture efficiency of 97%. The low efficiency penalty is due to the high moisture and hydrogen contents of the biomass, and the separation of combustion products and excess air streams in the CLOU process; these together provide an opportunity to recover a significant amount of heat by flue gas condensation at a higher temperature level than what is possible in a conventional boiler. The condensing heat recovery yields an 18 MW generator power increase (3 MW loss in net power output) for the CLOU plant; in the reference plant with conventional boiler, the same scheme could achieve an increase of 9 MW (generator) and a decrease of 8 MW (net).