This study explores the potential and impact of electricity cogeneration using Organic Rankine Cycle (ORC) integrated with small-scale biomass boilers within district heating systems. An analysis is conducted on a 3 MWth biomass-fired district heating plant in southern Sweden. Process monitoring data, collected over a one-year period from the plant, serves as the basis for simulation and analysis. The study examines operational changes and fuel usage at a local level, together with an extension to a regional scale considering both short-term and long-term energy system implications. The results show that integrating a 200 kWe ORC unit with the existing boiler having a flue gas condenser is cost-optimal and could cogenerate approximately 1.1 GWh electricity annually, with a levelized electricity cost of €64.4 per MWh. This is equivalent to a system power-to-heat ratio of 7.5%. From a broader energy system perspective, this efficient integration could potentially reduce CO2 emissions by 234∼454 tons per year when the saved energy locally is used to replace fossil fuels in the energy system, depending on how biomass is utilized and what type of fossil fuels are replaced. Increasing installed capacity of ORC unit to maximize electricity co-generation could result in a carbon abatement cost ranging from €204 to €79 per ton CO2. This cost fluctuates depending on the installed capacity, operation of the ORC units, and prevailing electricity prices. The study highlights the trade-off between financial gains and CO2 emission reductions, underscoring the complex decision-making involved in energy system optimization.