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 the community and help a local area meet its carbon targets quicker and more cost effectively. A SLES can also deliver wider social and economic value for residents and businesses.

There can be many components to a SLES and different ways to connect those components. This page will demonstrate different types of SLES and how they could be valuable for a Local Authority.

What defines a Smart Local Energy System?

Smart

Local

Energy System

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.

Digital Connected

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

Commercially Connected

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

Virtually Connected

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

Physically Connected

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:

Investor

• 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.

Customer

• 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.

Supporter

• 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.