The trend towards an increased importance of distributed (renewable) energy resources characterized by intermittent operation redefines the energy landscape. The stochastic nature of the energy systems on the supply side requires increased flexibility at the demand side. We present a model that determines the theoretical maximum of flexibility of a combined heat and power system coupled to a thermal energy storage solution that can be either centralized or decentralized. Conventional central heating, to meet the heat demand at peak moments, is also available. The implications of both storage concepts are evaluated in a reference district. The amount of flexibility created in the district heating system is determined by the approach of the system through delayed or forced operation mode. It is found that the distinction between the implementation of the thermal energy storage as a central unit or as a collection of local units, has a dramatic effect on the amount of available flexibility. (C) 2012 Elsevier Ltd. All rights reserved.