Abstract: Appropriate peak regulation compensation can motivate the combined heat and power（CHP） units to participate in power system peak regulation and hence promote wind power accommodation. This paper focused on the peak regulation compensation issue for CHP units. By optimizing the peak regulation compensation price for CHP units and properly allocate the peak regulation profit in each district heating system（DHS）, the CHP units are effectively motivated to utilize the thermal energy storage device and supplementary heating sources in the DHS to improve the peak regulation flexibility. Firstly, an optimization model for peak regulation compensation price decision was proposed and the corresponding solving algorithm was discussed, with a careful consideration of the DHS operation model and the coupling feature of the CHP units’ time-series peak regulation ability. Secondly, the contribution of each heat supply device in the DHS for power system peak regulation was analyzed, and a profit allocation method was proposed based on the Shapley value to properly share the peak regulation profit in each DHS. The simulation result shows the validity of the proposed methods. The change of the optimal compensation price and profit allocation strategy with heating load and wind penetration was also analyzed.