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This study presents a comprehensive dynamic process simulation model of a 1 MWth circulating fluidized bed test facility applied for lignite and refuse-derived fuel co-combustion. The developed dynamic process simulation model describes the circulating fluidized bed riser and the supplying system with a high level of detail considering heat transfer, gas-solid interaction, combustion, and fluid dynamics. The model was first tuned at two steady-state operation points and was then validated by the measured data from a long-term test campaign of the 1 MWth circulating fluidized bed test facility at various loads (60%–80% to 100%). During the load changes, the simulated pressure and temperature profiles along the combustor as well as the flue gas concentrations agree very well with the measurement data. Finally, increasing the proportion of waste-derived fuel in the co-combustion process was investigated to evaluate the flexibility of its use in power generation to further reduce CO2 emissions.