New report on local energy systems across UK

Energy Rev

The authors found that local energy systems are often ultimately managed by organisations outside the core energy sector, including local authorities, industrial estate companies, housing bodies, and universities.

They were also struck that, despite the challenges of working somewhat ‘against the grain’ of the UK’s centralised energy system, almost all the system operators in the study are working on expanding the scale, scope or ‘smartness’ of their systems.

The smart local energy systems (SLES) approach to the energy transition often seems like a radical departure from the present day UK energy system.

Much research activity focuses on experimental pilot and demonstration projects, whose focus on multivector energy systems at local scale contrasts with the national scale and separation of the heat, power and mobility energy vectors characteristic of the

mainstream energy system.

The report ‘Beyond the pilots’ summarises the findings from research with the operators of 29 local energy systems across the UK. The authors summarised 7 points to inform the next steps in SLES for energy policymakers and practitioners.

1. Better support is necessary for the considerable demand for greater local energy integration

Despite the challenges involved, all of the systems studied have achieved some degree of local vertical integration of different parts of the energy value chain – generation, distribution, retail and demand-side services. Many of them have also integrated horizontally, combining energy activities across multiple vectors and types of services such as provision of power, heating and mobility.

There is considerable pent-up demand for more local energy systems. Existing systems are present despite a difficult regulatory and market environment; there might be many more of them if the environment was more supportive.

Therefore, policy should support today’s local energy system operators in their ambitions to improve and do more, and facilitate the creation of new local energy systems.

2. Recognise the range of things – beyond price – that customers value about local

energy systems

Where residential customers had a say in the running of their system – often in various forms of community organisation – they tended to be very supportive of decarbonisation. Business customers of other systems were also interested in buying green energy, and connecting to local renewables helped provide traceability of that energy and guard against ‘greenwashing’. These findings should encourage local energy system operators to pursue the decarbonisation of their system and to be confident about promoting their green credentials to customers

3. Support organisations outside of the energy sector to play a role in local energy systems

A great range of organisations, beyond the ‘usual suspects’ in the core energy sector, are running local energy systems today: in particular, organisations with responsibility for many kinds of physical premises or estates. This diversity of operators is a strength, as it brings different perspectives, customer bases, experience and skills into the local energy sector. Policymakers and practitioners should cast their nets wide when consulting, and when seeking partners to play a part in the future development of SLES

4. Allow for the ‘local’ in local energy to be interpreted at a wide range of scales

The authors found local energy systems running at a wide range of scales: from some serving the operator or just a handful of houses or businesses, to others supplying thousands of customers. The findings therefore broadly support those of other EnergyREV

researchers, who have noted the “wild” variation in scales of ‘local’ energy projects (and the “elasticity” of the term ‘local’ in SLES demonstration projects). Policy and practice should build on this diversity of scales, and avoid trying to impose any ‘one size fits all’ definition of the scale of a local energy system

5. Support organisations to manage complex systems and maximise economic resilience

Diversifying revenue can help in building economic resilience (particularly in today’s

volatile energy world). But diversified systems can be complex to run, and operating organisations – particularly smaller organisations – might need support in accessing

or developing the necessary management skills. Providing such support could help realise the benefits of a diversity of operators and scales of operation noted above.

6. Help provide a wide range of SLES-relevant skills and training opportunities, across the

Country

Many of the system operators relied on national specialist contractors for key aspects of

system maintenance – alongside local contractors for less specialist work. In addition

to core energy engineering skills, interviewees spoke of the need for specialist skills in ICT, data management, and financial and business planning.

The authors therefore suggest that more training and skills development opportunities relevant to SLES should be available across the UK

7. Encourage life cycle sustainability thinking, and use policy and regulation to help system operators address circular economy issues.

Underreporting of issues around waste is very common; both in relation to system operation and, in particular, end-of-life disposal of system components.

These are issues that policymakers and SLES development programmes may be best placed to tackle. While the energy sector is understandably focussed on the urgency of decarbonisation, the world faces multiple ecological and resource crises, and regulation and policy should encourage the adoption of circular economy approaches to sustainable resource use.

You can read the full report here: Link to the report.