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Smart Local Energy Systems (SLES) are projects that implement a varied and complex set of solutions using local assets to potentially provide resilience, network services, better consumer experiences and local network constraint management.
This report examines the investment landscape for SLES. It considers the range of potential types of investment and defines, in outline, their main investment criteria. This has been considered across the SLES development lifecycle, at different stages of maturity, and with different amounts of investment at different rates of return.
For this report, SLES projects have been broadly categorised using four groups:
Note these categories are not discrete and SLES will often fall into multiple groups. For example, a heat network may require long-term assets (the pipes), short term assets (boilers), a software package (optimisation algorithm) and a service offering to provide the heat to a customer.
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.
Find out moreThis report concludes the two most important criteria in relation to SLES are risk appetite and minimum investment threshold. Due to their small scale, SLES will likely require relatively small levels of capital relative to other energy investments. Given their relatively unproven nature, there is a greater risk from an investor’s point of view in investing in SLES when compared to other energy investments.
A summary of the positives and negatives of each investment type for SLES is provided in a Table 1 in the Executive Summary of the report. This offers a current view and a potential future view of their suitability to invest in SLES.
The broad recommendations identified by this analysis are:
Smart Local Energy Systems: Investing in Local Energy
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We empower and advise Local Authorities, Network Operators, and Central & Devolved Governments to take Net Zero action… mobilising the plans, projects, processes and partners you need to decarbonise local areas.
Find out moreFind out more about how Energy Systems Catapult can help you and your teams
Find out more about how Energy Systems Catapult can help you and your teams