Small scale biomass-based cogeneration has the potential to contribute significantly to a clean, flexible, secure, and cost-efficient energy system. It provides flexibility to future energy systems by balancing variable intermittent renewable energy sources. To exploit its flexibility, a smart control unit is needed. To enable smart control of a cogeneration unit, and to determine its optimal working points, a dynamic system model is required. The purpose of this study is to develop, parameterize and tune a dynamic model of a cogeneration plant fuelled with fast pyrolysis bio-oil. The system is a hybrid diesel generator/flue gas boiler plant for electricity generation and water/space heating. The plant has two unique features: (i) pyrolysis bio-oil is a new fuel for both engine and boiler, and as such it influences their operation and emissions, (ii) power and heat generation are partially decoupled hence non-linearly correlated. The paper presents the integration of the components’ dynamic models into a system model. The model is parameterized and partially validated using measurements from a turbocharged four-cylinder diesel engine and a swirl burner both running on FPBO. Preliminary controls are designed and evaluated. Results show applicability and usefulness of the model for cogeneration system analysis and control design evaluation.