Abstract This study analyses the sustainability of a bioenergy system fed by residual biomass with high moisture content (citrus peel), which is designed in cogeneration mode and integrated with the factory generating the residue. The impacts of electricity production are comprehensively assessed by conducting thermodynamic and environmental analyses with a life cycle approach. Two scenarios were analyzed considering the differences in the process layouts between juice factories. The first scenario with wet feedstock (Scenario W) includes the drying process in the bioenergy plant's boundaries. A second scenario uses dry feedstock (Scenario D), and the drying process is considered outside the boundaries. The thermodynamic performances are assessed by life cycle energy/exergy efficiencies, the cumulative exergy demand of non-renewable resources (CExDnr), and energy/exergy return on investment. Additionally, a new renewability indicator is introduced, hereby named Integrated Renewability (IR), to consider the origin (renewable or non-renewable) of the resources substituted by the side products. The Life Cycle Assessment shows that the scrubbing process, fed with bio-oil, could undermine the system’s sustainability. The overall exergy efficiency was determined to be 0.29 and 0.24 for Scenario D and Scenario W, respectively. Compared to the electricity from the national grid (Italy), the integrated bioenergy system leads to lower life cycle exergy efficiencies in both scenarios (0.24 and 0.20 for Scenario D and Scenario W, respectively, Vs. 0.34 for national grid), higher IR (3.1 and 1.5 Vs. −0.9), lower CExDnr (0.32 and 0.33 vs. 1.9 MWh/MWhe), and lower climate change impacts (−332 and 1.29 vs. 447 kgCO2/MWhe).