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District heating has an important role in the shift to carbon-neutral energy systems through enabling the use of heat sources that would otherwise be wasted to cover buildings’ heating demands. The availability of many renewable and surplus heat sources is however in opposite phase with the heating demand, creating a demand for seasonal thermal energy storage. This study performs a techno-economic assessment of the heat supply system of a residential area in Norway, where seasonal storage storing excess heat from a waste incineration plant is being planned. A heat supply solution combining seasonal storage and low-temperature district heating was compared with two more conventional alternatives: high-temperature district heating and direct electric heating.