This paper aims to visualize how the planned electrification of heat demand together with the utilization of energy flexibility in buildings will influence the performance of local electricity network. Thereby, the work contributes to the research on smart energy system in the residential sector. The flexibility service is provided by two demand-side-management strategies a) activation of the thermal mass to modulate load profile of a heat pump, b) control of household appliances' starting times. Three configurations of load mix in the local electricity network are investigated: a) domination of non-renovated houses, b) with equal share of high and low heat demand houses, c) domination of energy efficient houses. The model is soft-coupled and anchored in existing low voltage (LV) network and existing residential buildings. The energy flexible buildings enhance the LV network performance, by decreasing the afternoon peaks, without compromising the occupants’ thermal comfort. The highest impact is for the LV network dominated by energy efficient houses. There are also new challenges, namely the newly created peak loads and transformer overloading during night time. It is a consequence of uniform price signal sent to all flexible customers and electrification of heating demand without parallel improvement of energy performance.