Supporting the creation of Smart Local Energy Systems to attract innovative low carbon businesses, infrastructure, investment and jobs

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Smart Local Energy Systems and their role in achieving Net Zero

A Smart Local Energy System (SLES) is a way to bring together different energy assets and infrastructure in a local area, and make them operate in a smarter way.

This will increase value for local authorities and the community, helping local places meet their carbon targets more quickly and more cost effectively. A SLES can also deliver wider social and economic value for residents and businesses.

Below we outline the different types of SLES, made up of many different components and with different ways to connect those components.

This work on Smart Local Energy Systems was funded by UK Research and Innovation under the Prospering from the Energy Revolution challenge.

What defines a Smart Local Energy System?


By Design – using data for Local Area Energy Plans to identify opportunities for the energy system.

By Operation – automated use of assets in the house and potentially automated trading of assets in energy markets.

Learnt or Autonomous – how the operation of the assets are delivered.


Defined by region or boundary – often linked to a specific area with a supporting Local Authority.

Better outcomes for the community – aim to engage the local community in developing the SLES to meet the needs of the local area.

Enabling Net Zero in line with local strategies – working with LAs to identify measures that meet local net zero strategies.

Energy System

Optimised and more efficient – by taking a local, more granular approach, the end result should create a more efficient, integrated energy system

Multi-vector approach – taking power, heat and transport energy requirements into account and how they integrate.

User-centred design – ensuring the development of the smart energy system delivers desired outcomes for the consumer

How is a Smart Local Energy System connected?

A smart local energy system is about joining together parts of the local system in a more valuable way. This can be done from design at the start, like a heat network and solar farm powering a new build development. Or it can happen organically, with existing energy assets and infrastructure being linked together over time. These can be physical connections like pipes and wires, or more intangible like commercial or digital connections.

Collecting data and insights for the local area that can be safely accessed by 3rd parties. Helps build improve transparency and quality of services, such as:

  • Asset register
  • Data sharing
  • Data marketplace
  • Project marketplace

Why do we need Smart Energy Systems at a Local Level?

Smart local energy systems can deliver value to the local area in many ways:

Net Zero

Reducing carbon emissions more efficiently and in a whole systems manner

  • Reducing local emissions
  • Enabling roll out of low carbon technology
  • Reducing local energy use
  • Increasing local awareness of climate change and low carbon alternatives


New opportunities to generate revenue, capture monetary value or reduce expenditure

  • Lower energy bills for end users
  • Generating income for the local authority and reducing public money reliancex

System Resilience

Increasing the ability of the local energy system to more effectively adapt to the Net Zero transition

  • Reducing impact of future energy price increases and outages
  • Reducing impact of constraints and infrastructure upgrades
  • Increased local energy security

Local Growth

Increased capacity & capability to deliver net zero creates opportunity for local jobs, training and enterprise

Equity and Social

Ability to create a fairer society and ensure the energy transition is just and equitable

  • Opportunities to reduce fuel poverty and improve social support
  • Increasing community engagement and improving pride of place

Health and Wellbeing

Creating healthier buildings, spaces and services

  • Reducing air pollution
  • Better health outcomes, reduced illness and better living conditions
  • Improved control and comfort
  • Improved living and working conditions

Where do local authorities fit into Smart Local Energy Systems?

Local Authorities and the community are key to the success of a SLES. They can play a central role in financing, designing or operating a SLES. Or they can take a more secondary role of making sure community interests are accounted for without getting involved in delivery or operations. The three roles we have identified are:

Asset investor

Investing and owning in a generation, storage or local energy asset in the local area.

Services company (ESCo)

Invest in a service company that acts as the delivery mechanism for the energy services provided to customers.

Market Platforms

Play a central role in the design of local energy markets and local energy platforms, that allows the community to trade different energy services.

Types of Smart Local Energy Systems

As part of the Prospering from the Energy Revolution programme funded by Innovate UK, we have been investigating different types of SLES being developed and the benefits they can bring to the local area. We have so far identified five main types of SLES.

Research and Innovation Insights


Enabling Smart Local Energy Systems: The value of digitalisation and data best practice

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Enabling Smart Local Energy Systems: Finance and Investment

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Enabling Smart Local Energy Systems: Social housing opportunities

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User Acceptance of Smart Local Energy Systems: Key insights on public opinion

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Data Ethics and Bias: Practical steps to avoid discrimination in future Smart Local Energy Systems

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Emerging business models for smart local energy systems

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Policy and Regulatory Insights

Policy Brief

Active Network Management (ANM): Opportunities and risks for Smart Local Energy Systems

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Policy Brief

Local Energy Markets and Fairness: Insights for Smart Local Energy Systems

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Scaling up investment in Smart Local Energy Systems

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Energy White Paper: What it means for Smart Local Energy Systems

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Smart Systems and Flexibility Plan (2021): What it means for Smart Local Energy Systems

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Net Zero Places

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

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