A review of sector coupling possibilities between the heat and electricity sectors in Sweden is made in this report. First, a review of the way the heat sector works in Denmark, Finland and Sweden works is performed. Finland and Sweden have similar setups with deregulated heat sectors in which district heating companies set their billing price freely considering different cost factors, including costs for alternative technologies to which consumers could switch. Denmark has had a more regulated approach with prices being reviewed by the regulator. The sector coupling between the electricity sector in Denmark has been stronger than in both Sweden and Finland. District heating companies had an obligation until 2019 to participate in both the day-ahead market and the balancing market (mFRR). CHP plants in Denmark have also participated to frequency regulation (aFRR). There is still a non-negligible share of CHP plants in Denmark running on fossil fuels such as natural gas and coal. Large investments in heat pumps, biofuels and solar thermal facilities have been identified as alternatives to these CHP plants to enable a fossil free heating sector. Second, the current electricity and ancillary service markets in Sweden are described. Recent experiences with local and regional flexibility markets in Sweden are reviewed. District heating companies are particularly well-fitted for participating in these markets thanks to their geographical location close to the electric consumption centres in the cities. Third, a review of the state-of-the-art research on the participation of district heating systems to the electricity and ancillary service markets is performed. It is shown that the flexibility in district heating systems that can be used in the electricity sector can take many forms: changes in the electricity production / consumption of heat production units, by-product usage of the excess heat (e.g. fuel drying), thermal storage in water tanks or other kinds of storage facilities, thermal storage in the pipeline network and thermal storage at the customers’ site (for example in buildings). Research on the technical capabilities shows that many units in the district heating systems can fulfil the requirements for delivering ancillary services. Many research works have identified possible economical gains by participating in more markets on the electricity side (for example ancillary service markets). However, many research works in this field have focused on single CHP plants instead of considering the whole portfolio of units in the district heating systems. To get a more detailed assessment of the profitability of increasing the participation of district heating companies in the electricity sector, it is advocated to develop operational planning and operations tools for district heating systems that can capture the hourly variability of prices of the electricity and ancillary service markets, as well as consider the order in which decisions have to be taken on these markets (i.e. the time order in which the different markets operate). These tools will be developed in the coming work in the project.