Through energy efficiency measures, it is possible to reduce heat surplus in the Pulp and paper industry. Yet pulp and paper mills situated in Countries with a heat demand for residential and commercial buildings for the major part of the year are potential heat Suppliers. However, striving to utilize the heat within the mills for efficient energy use Could conflict with the delivery of excess heat to a district heating system. As part of a project to optimize a regional energy system, a sulfate pulp mill situated in central Sweden is analyzed, focusing on providing heat and electricity to the mill and its surrounding energy systems. An energy system optimization method based on mixed integer linear programming is used for studying energy system measures on an aggregated level. An extended system, where the mill is integrated in a regional heat market (HM), is evaluated in parallel with the present system. The use of either hot sewage or a heat PUMP for heat deliveries is analyzed along with process integration measures. The benefits of adding a condensing unit to the back-pressure steam turbine are also investigated. The results show that the use of hot sewage or a heat pump for heat deliveries is beneficial only in combination with extended heat deliveries to an HM. Process integration measures are beneficial and even increase the benefit of selling more heat for district heating. Adding a condensing turbine unit is most beneficial in combination with extended heat deliveries and process integration. Copyright (c) 2007 John Wiley & Sons, Ltd.