Supporting the creation of Smart Local Energy Systems to attract innovative low carbon businesses, infrastructure, investment and jobs
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 making 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?
Smart
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.
Local
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 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 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
Removing barriers and complexity so that users, generators and supply chain can more easily trade. Involves aggregating smaller scale customers or generators and helps them deliver more valuable services that otherwise would not be available to them, such as:
- Local Energy Service Provider
- Local Energy Market
- Aggregators and Trading Services
- Joint Ventures and SPVs
- ESCo
Managing the smart local energy system virtually to improve balancing, flexibility and resilience. Involves better matching energy demand with local generation, especially during times of constraint for the network, such as:
- Local energy market
- Local flexibility market
- Virtual power plants
Smart local energy that is physically connected and controlled. Physically linking energy assets together for greater value, such as:
- Anchor asset
- EV charging fed by storage
- Heat network fed by solar
Why do we need need Smart Local Energy Systems?
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
Financial
New opportunities to generate revenue, capture monetary value or reduce expenditure
- Lower bills for end users
- Generating income for the local authority and reducing public money reliance
System Resilience
Increasing the ability of the local energy system to more effectively adapt to the Net Zero transition
- Reducing impact of future 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 heathier 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 to 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.
Energy off-taker
A local authority who buys energy from the SLES for its own buildings or operations. This includes power, heat and transport.
Building
Public buildings or social housing that benefit from the installation of energy efficiency improvements or low carbon technology.
Land
Lease land to 3rd party to develop generation assets.
Community engagement
Support project engagement with local groups by providing local community context and identifying key groups/routes to engaging with the community.
Local Area Energy Planning
Either provide data to allow others to undertake LAEP or undertake themselves.
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.
Project Market Place
Linking potential renewable energy projects in a local energy plan or climate strategy to supply chain and investors.
Learn more
Local Flexibility Market
Driven by a single buyer at the top creating a market for aggregators and distributed energy assets to provide flexibility in the local area.
Learn more
Local Energy Market
A marketplace that matches many local energy users with many local energy assets like solar, storage and EV charging.
Learn more
Virtual Network Manager
A virtual balancing system that optimises local generation and demand, often in constrained areas to enable new connections, or where curtailment is impacting generators
Learn more
Anchor Asset
A model that facilitates the connection of multiple energy assets to deliver lower carbon and lower cost end service to the end users.
Learn more
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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