The global ambitions to hamper the greenhouse effect has led to ambitious targets for increasing renewable energy use. This, in combination with recent years' vast development of wind and solar power, implies that there will be significant amounts of variable renewable electricity (VRE) in future energy systems. With the inherent variability in VRE production comes a need for increased contingency in power systems. This requires both controllable production and consumption of power to cope with VRE deficits and surpluses. The purpose of this doctoral thesis is to investigate the potential for providing such power balancing services from Swedish district heating systems (DHS). Analyses are made for different system levels: community, regional, and national. Computer simulations of DH production systems with combined heat and power (CHP) plants, heat pumps, and thermal energy storage (TES), operated to supply a power balancing demand, are here shown to potentially reduce VRE deficits and surpluses. The results further show that reducing peak deficits and/or surpluses mainly depends on the installed capacities in CHP units and/or heat pumps. However, annual deficits or surpluses are reduced more if the system includes a TES. Also, the shares of wind and solar power in VRE mixes are shown to be relevant for fuel use and system performance. Solar-dominated VRE promotes heat pumps, reduces fuel use in CHP, and motivates a seasonal operation of TESs. Wind-dominated VRE matches with high capacities in CHP units, yields increased fuel use and motivates short-term operation of TESs. A crucial limitation is competition for the heat load between heat pumps and CHP units, which reduces the potential for CHP production. Competition between stored heat and heat pumps also occurs in systems with smaller TESs and large amounts of surplus electricity. In order for power balancing services to be economically viable for DHS operators, changed market structures that appropriately value the delivered services are likely required. The overall conclusions are: DHSs can offer power balancing, a high share of PV is essential to reduce fuel use, and finally, seasonal TESs are needed to cope with large amounts of surplus heat and/or replacement of peak load units.