The objective of this paper is to identify the most valuable sector for the use of bioenergy in a flexible energy system in order to meet the energy policy objectives of Inland Norway. A reference system was used to construct alternative systems in the heating and transport sectors. The alternative system in the heating sector is based on heat pumps and bio-heat boilers while the alternative systems in the transport sector are based on three different pathways: bio-dimethyl ether, hydrogen fuel cell vehicles and battery electric vehicles. The alternative systems were compared with the reference system after a business-economic optimisation had been made using an energy system analysis tool. The results show that the excess electricity availability due to increased energy efficiency measures hampers the competitiveness and penetration of bio-heating over heat pumps in the heating sector. Indeed, the synergy effect of using bio-dimethyl ether in the transport sector for an increased share of renewable energy sources is much higher than that of the hydrogen fuel cell vehicle and battery electric vehicle pathways. The study also revealed that increasing renewable energy production would increase the renewable energy share more than what would be achieved by an increase in energy efficiency. (C) 2015 Elsevier Ltd. All rights reserved.