This study investigates how thermal energy storage (TES) influences the cost-optimal investment and operation of electricity and district heating (DH) systems in different scenarios. Greenfield energy system modelling for Year 2050 with a high time resolution shows that sensible TES strategies have a strong impact on the composition and operation of the DH system in all investigated scenarios. The introduction of TES displaces to a significant extent the heat-only boilers in all scenarios and can promote solar heating in small DH networks. The modelling shows that TES also promotes the use of power-to-heat processes and enables combined heat and power plants to increase full-load hours, with simultaneous adaptation to the variable production in the electricity system. A major benefit derived from TES is the ability to respond to rapid variations in the electricity system. Thus, the pit and tank storage systems with higher (dis)charging capacities are preferred over borehole storage. ARTICLE HISTORY