Do Smart Local Energy Systems need a Code of Practice? – Jim Lott

Comment by Jim Lott, Technical Liaison Lead, Energy Revolution Integration Service

Coming in many varied forms, Smart Local Energy Systems are a recent development within the energy system; integrating power, heat and transport to develop cost efficient ways to reduce carbon emissions, tailored to the needs of local areas.

For the Smart Local Energy Systems (SLES) concept to mature and thrive, it is vital that customers are protected and identified risks can be effectively mitigated. Having these in place helps to increase the confidence of both investors and customers.

Energy Systems Catapult created the Energy Revolution Integration Service (ERIS) – to providing expert guidance and support to SLES projects across the UK, as part of the £100 million Innovate UK funded Prospering from the Energy Revolution (PFER) programme under the Clean Growth Industrial Challenge.

What is a Smart Local Energy System?

A Smart Local Energy System (SLES) is a way to bring together different energy assets in a local area and make them operate in a smarter way. They could be connected physically (e.g. a solar farm powering a housing development) or digitally (e.g. a virtual energy marketplace). They will help a local area decarbonise more quickly and cost effectively, and can deliver wider social and economic value for communities.

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The Energy Revolution Integration Service recently analysed two things:

  1. How other parts of the energy sector have used Codes of Practice to raise their collective best practice standards?
  2. What lessons SLES can learn from the wider sector?


Codes of Practice – 3 types

For the uninitiated, Codes of Practice (COP) are a set of written guidelines agreed by a group of people with a particular focus. Our analysis found that there are three main types of COP.

1. Elemental codes

Focusing on a single grid-edge technology, attribute or aspect. These codes are generally technical. The IET Code of Practice for Electric Vehicle Charging Equipment Installation is one such example of an elemental code.

2. Integration codes

Focusing on the integration of different elements of a system and cover technical and commercial aspects, as exemplified by the heat networks COP, which we will discuss further in this article.

3. Statutory/regulatory codes

Focusing on the operation of the established and regulated energy industry and are exclusive to licensed operators, such as the Competition in Connections COP, which was driven by Ofgem.

The common denominator in all of these forms of COP is that they draw on a wider set of expertise and knowledge than any individual project or company holds to identify opportunities to improve practice and identify shared risks. This system brings clear benefits – it acts to protect customers and improves investor confidence in the wider sector.

Codes of Practice – Heat Networks

The development of a COP covering heat networks/district heating is a good example of the benefits that integrated COPs can offer for Smart Local Energy Systems. From the outset of its development, there was a strong focus on securing involvement and buy-in across the heat networks sector, engaging both technical and commercial stakeholders.

For instance, Philip Jones, a partner at SLES project GreenSCIES, who was closely involved in the development of the COP for heat networks, notes that not only did they assemble a large committee of 25 to drive the process, but they created a wider “corresponding group” with whom all documents were shared so that the whole sector was aware of the development of the COP throughout the process.

ERIS’s research on successful COPs has highlighted the importance of gaining wide buy-in from an early stage, and the experience of the heat networks COP reinforces this finding. By taking this approach, the developers of the COP could ensure it reflected the full needs of relevant stakeholders, setting the minimum technical and commercial standards needed, but also acting to reassure clients and investors.

“The Code of Practice has been tremendously successful in influencing both the technical standards in the market, but also in the client buying end of the market. A lot of clients wanting to buy heat networks have put compliance with the Code of Practice in their tender documents. This shows support to the buying marketplace, as well as giving rules and confidence to the technical end of the market.”

Philip Jones – a partner at SLES project GreenSCIES

Perhaps the best example of the COP’s success has been its clear influence on the Government’s forthcoming statutory regulation for heat networks. The recent consultation, which has closed, draws heavily on the COP.

The experience of the heat networks COP strongly corroborates findings within ERIS’s programme of research into the impact of COPs. In influencing the development of a regulatory framework, the heat networks COP exemplifies the process, whereby COPs and regulations come to influence each other in a positive feedback loop.

Figure 1: Heat Networks Codes of Practice and the development of Regulatory frameworks influenced each other in a positive feedback loop.

Figure 1: Heat Networks Codes of Practice and the development of Regulatory frameworks influenced each other in a positive feedback loop.

Codes of Practice – Smart Local Energy Systems

Smart Local Energy Systems today are in an comparable position to that of UK heat networks in the early 2010s, with both seen as recent innovations in the energy system. This is important because the success of a COP, as found in our research, is hugely influenced by the timing of its development.

“When we started developing a heat networks Code of Practice in 2013, there was a lot of guidance already. We had documents saying you could do X, or approach Y in this way, but there was nothing that said that you should do this or shouldn’t do that. When we built the COP, we were not starting from a blank slate, which wouldn’t have worked.”

Philip Jones – a partner at SLES project GreenSCIES

Given where SLES are in their development, now may not be the right time to move straight into developing a COP. One critical barrier in our analysis was the lack of an accepted definition of a SLES project. While all the projects ERIS supports have certain attributes in common, there is also wide variation in many aspects of SLES, such as the technologies used, services offered, and customers served. SLES designs also need to take into account the different needs of communities.

Figure 2: The range of technologies, customers and services that are typically involved in SLES projects.

Figure 2: The range of technologies, customers and services that are typically involved in SLES projects.

However, given the clear benefits of a COP, now is the time to take the first steps on the road towards being able to develop a COP. For SLES, this means bringing together stakeholders from across the sector to identify the existing rules regarding their key shared attributes, key risks in their development cycle, and working towards an agreed definition of a SLES project. ERIS will seek to progress this work with SLES projects in the next year.

Gordon Graham, who leads this research for the Energy Systems Catapult, is emphatic on the consequences of not taking these first steps.

“Look at both technical and commercial aspects. If you don’t have in place a structure or accepted set of standards, then you will get projects which are implemented with varying degrees of success. Once you get a bad situation, it will turn people off the SLES market as a whole.”

Gordon Graham – ERIS Senior Stakeholder Manager

The ERIS team would like to hear your views about the importance of Codes of Practice in building the energy systems of the future. To play a role in shaping the development of best practice in the SLES sector, please Get in Touch with the Service Platform – Energy Revolution Integration Service.

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