District-heating (DH) networks can utilise heat that would otherwise be of limited use. This study analyses a municipal DH system, which uses waste heat from industries and waste incineration as base suppliers of heat and is currently investing in a natural-gas fired combined heat-and-power (CHP) plant. An important assumption in this study is of the establishment of an integrated European electricity-market, which means higher electricity prices than are traditional in Sweden. The study shows that there is space in the DH system for all three energy carriers; heat from industries, waste incineration and CHP plants. The new CHP plant replaces mainly other heat sources, i.e., hot water boilers and heat pumps. The new CHP plant's operating time is strongly dependent on the electricity price. (c) 2006 Elsevier Ltd. All rights reserved.