Integrating District Heating (DH) with the Electric Power Sector (EPS) offers a key strategy for addressing climate challenges by improving resource efficiency and enabling low-carbon transitions. Through Flexible Sector Coupling (FSC) mechanisms, DH systems can mitigate greenhouse gas emissions and enhance system flexibility by absorbing intermittent renewable electricity surpluses. This study evaluates the potential of FSC enabled through Thermal Energy Storage (TES) in DH applications, using the energy system of Oskarshamn, Sweden, as a case study. A soft-linked modelling framework is developed by combining a long-term investment optimisation model based on the Open-Source energy Modelling System (OSeMOSYS) with a high-resolution hourly dispatch model. These models are iteratively linked to align strategic investment decisions with operational feasibility. The analysis evaluates scenarios based on variations in electricity prices, TES capital costs, and the availability of self-consumption via heat pumps and excess heat. Key performance indicators, including Levelised Cost Of Energy (LCOE) and CO<inf>2</inf> emissions, are used to compare outcomes. Results show that the feasibility of FSC is strongly influenced by electricity price trends and TES investment costs. High electricity prices favour cogeneration of electricity and heat, while lower prices lead to increased investment in TES and heat pumps, prioritising heat production. Scenarios with low electricity prices achieve lower LCOEs (37.5–42.7 €/MWh) compared to those with high prices (46.6 €/MWh). The approach demonstrates that soft linking the capacity expansion model and dispatch models strengthens energy system planning by integrating long-term and short-term perspectives. Overall, the study highlights the potential of FSC with TES for cost-effective and resilient DH planning under different future energy conditions. Future work could explore the wider deployment of FSC by assessing its integration with electricity market services, expanding to multi-city or regional DH networks, and evaluating enabling policies, business models, and digital control strategies for large-scale implementation.