Upscaling of Smart Local Energy Systems: Positional Patterns or Preferred Pathways?

Upscaling of Smart Local Energy Systems: Positional Patterns or Preferred Pathways?

By Damiete Emmanuel-Yusuf and Walter Wehrmeyer, Centre for Environment and Sustainability University of Surrey

The EnergyREV team at the University of Surrey’s Centre for Environment and Sustainability is developing upscaling pathways for Smart Local Energy Systems (SLES). A review of the literature found a lack of information on the upscaling of SLES so causal links from available literature have been identified, from which pathways have been generated and refined in expert workshops. This has been used to develop a conceptual model on how SLES start up and grow across two distinct, interdependent phases, as illustrated in the image above. One question remains around the development of SLES - do specific ‘Preferred Pathways’ exist or are SLESs’ too context-specific for a general pathway model – Positional Patterns?

We have also explored the relevance and practical feasibility of these pathways using interviews with SLES practitioners and PFER demonstrators with these key insights:

Policy/Regulation - Different regulations and different local contexts require SLES solutions with completely different communities, geographies, demographics and sectors. A national approach is neither feasible nor desirable.

Institutional changes and the devolvement of powers to local authorities are key: Providing regions with regulatory or economic powers (levies on energy charges to fund activities) will facilitate zero carbon faster and with greater acceptance than a national one-size-fits-all. Ofgem appears too removed from local networks and local opportunities to empower and enact resources.

Specific Government backed subsidies are needed for SLES: Without institutional innovation, the current industry structure means that provision of green tariffs help but won't increase investment on renewables or SLES.

Business and Markets - Commercial and business innovation are needed alongside technology innovation. Deriving workable business models is necessary to find finance and operate technology innovation.

SLES must offer more product variety for its consumers, given the right powers and market conditions. It is not ‘just’ the electricity out of the wall, but environment, control and locality can be valued and rewarded as part of the ‘Energy Trilemma’ services.

We need to build market structures and policies that are flexible. A better market design must relate to people who generate, have storage, have flexible demand and own assets with inspiration and rewards.

Skills and Learning - Creating and upscaling of SLES requires a skills network and organisational ecosystems that may take decades to establish. Reproducing SLES into different contexts is very difficult. However, components or aspects of can be tailored and lessons can be transferred.

Recruitment can be a challenge because some tasks are very complex and required specific competencies. Types and channels of engagement, legal and regulatory oversight, financial systems and their governance, how to share financial risks all shape the design and success of the SLES.

Local Authorities urgently need to build capability in energy systems to create integrated plans and energy that helps them achieve goals in all those other areas within their democratic mandate to enable democratisation and localism of energy.

Social Actors - Engaging with key catalyst community groups to create smart and fair neighbourhoods which may involve the network operator, neighbourhood sub-stations, local business and public institutions to create social capital and generate economic muscle, so that social business models are developed towards innovation adoption.

Technology uptake for research or usage depend on the users, thereby risking low utilisation or low adoption. Most research needs to relate to economic, business and governance innovation and much less towards the ‘hard’ technology to drive forward change. Good communication and marketing strategies are also required.

Flexible assessment procedures are needed that can account for future changes in behaviour e.g. COVID19 and the need for early adopters and a willingness to share data and experience.

Not all drivers for SLES are financial with changing preferences. Local Authorities may be more interested in energy poverty than climate change, others seek economic returns, so we will find local preferences to address the Energy Trilemma.

In conclusion, firstly specialised innovation ecosystems and unique local conditions mean that partial replication of key aspects of the system is more feasible than a total replication. Growth through upscaling is more likely than complete replication. Secondly, energy security and viable commercial opportunities are key drivers with less emphasis on environmental concerns. Thirdly, institutional innovation is key as well as finding social and business models to fund SLES development and skills improvements. Finally, effective and flexible marketing and communications strategies are necessary to engage local communities.