In order to build reliable and robust structures for the future power supply, flexibilities of electrical generation, consumption and storage have to be increased. Within Dual Demand Side Management, the feasibility of a city quarter to manage locally its energy supply and to stabilize the regional grid is investigated. The concept focuses on the potential thermal storage systems provided by the existing building stock and on heat pumps as well as combined heat and power systems as generation and flexible storage units. Further, the physical building model and the distribution grid model will be coupled to a multi-energy simulation platform, to investigate the energy management options and the load shifting potential. In this paper we present the challenges met in process of system modeling. The chosen approaches are presented in two main sections, modeling and simulation requirements, together with discussed alternative solutions, drawbacks and limitations. The section Modeling deals with the user model and electricity demand forecasting, the building and electrical models. Main issues in the development of the building model concern the lack of available information of residents' behavior and building characteristics for its parameterization. Computational issues regarding the multi-energy simulation platform are discussed separately for the model coupling, the electrical and thermal simulation in the section Simulation Requirements.