A Smart Local Energy System (SLES) is a way to connect together a variety of energy technologies through a shared infrastructure within a local area, using data analytics and automation to optimise the system for maximum efficiency.

Developing such a networked system will increase the value of the individual energy technologies for households, the local community, the local Council, and the electricity network operator, driving down long-term energy costs and helping the UK meet its carbon emissions reduction goals.

What makes up a Smart Local Energy System?

A Smart Local Energy System is comprised of the following factors:


Technologies are managed using smart digital software which evaluates a variety of factors in order to gain maximum efficiency from the system. Examples include predicted weather patterns and temperature, current renewable electricity generation, available energy storage capacity, and half-hourly changes in electricity pricing. 


The system is typically contained within a geographically determined boundary, such as a street, a neighbourhood, or a local authority. In this way, all of the connected technologies are constrained by the same network connection capacity and local weather phenomena. System benefits can also be developed and shared at a local level.


It is expected that Smart Local Energy Systems will be comprised primarily of renewable energy resources, such as solar power, wind power, or hydro power.

As our energy demand changes to become more electrified (electric vehicles, electric heating) then we will need to change the way that we generate and distribute that energy.

Instead of energy generation happening miles away at distant power plants, it will be much more prevalent in the places that we live and work, from solar power on your roof to hydro power from a local river, energy will become much more ‘local’. 


Energy technologies will be connected together to enable them to function as a cohesive unit. This could include energy generation technologies, smart sensors and data collectors, heating and lighting technologies, remote or autonomous control systems, and smart meters. 

Systems can be linked via physical connectors like cables or through ‘virtual’ networks facilitated by cloud based software.

What are the economic benefits of developing a smart local energy system?

A smart local energy system offers a variety of financial advantages. This system integrates modern technologies such as smart meters, renewable energy sources, energy storage systems, and intelligent demand-response mechanisms to ensure maximally cost-effective energy management.

A smart local energy system also maximises the efficient use of energy by reducing energy waste and thereby decreasing operational costs. By leveraging real-time data and analytics, it enables precise demand prediction and load balancing, avoiding costly overproduction or shortfalls of supply. 

Because such systems often focus on renewable energy sources like solar, wind, and water, they reduce a community’s dependence on fossil fuels, reducing energy import costs and potentially keeping more money flowing within a local economy. This can stimulate local job creation in renewable energy industries and strengthen the local tax-base.

Smart local energy systems can also tap into demand-response signals from the national electricity network, enabling consumers to adjust their energy consumption based on price fluctuations and grid demands. This not only empowers consumers to reduce costs by using energy when its at its cheapest, but also reduces grid stresses at times of peak demand, subsequently lowering overall energy costs and the need for expensive network upgrades.

Example of a Smart Local Energy System

Smart Local Energy Systems are still in their relative infancy and are yet to achieve widespread adoption. 

However, there are a number of successful demonstration projects in operation which prove that the concept works and can deliver clean renewable energy in an efficient and intelligent way.

Project LEO (Oxford)

Project LEO stands for Local Energy Oxford. 

This project was established to test how local decentralised energy solutions can help the UK balance its energy network by making changes to how much energy we generate, use, or store. 

This ‘flexibility’ can make our energy network more efficient, and Project LEO used Oxfordshire as a testbed to see how different approaches could be implemented. Examples included using solar on a school to charge a battery storage unit which can be used to provide flexibility services, or using the River Thames as a battery by storing water upstream from a hydro and releasing it at times when electricity generation was needed. 

What upfront capital expenditure is involved when establishing a Smart Local Energy System?

Developing a smart local energy system necessitates careful consideration of various capital expenditures. Firstly, infrastructure investment is essential for installing smart meters, sensors, and communication networks which enable real-time data collection and management. Additionally, investments in renewable energy sources like solar panels, wind turbines, and energy storage systems are vital components of the system, driving sustainable energy generation.

Integration costs require consideration, accounting for the expense of software and hardware integration to create a seamless, interconnected energy ecosystem. Smart grid development can require significant capital, involving capacity upgrades to existing grid infrastructure in order to accommodate bidirectional energy flows and distributed energy resources.

Cybersecurity measures are crucial to safeguard the system from external threats, requiring investments in advanced security technologies and protocols. Workforce training and education are also necessary to ensure the technology can be operated and maintained effectively.

Regulatory compliance costs must be considered, as adherence to regulations and standards may require adjustments or additional investments. 

Remote monitoring and control software forms an integral part of the smart local energy system ecosphere. Photo: Unsplash.

How can a Smart Local Energy System make a city more resilient?

A smart local energy system can significantly enhance a city’s resilience by providing adaptive and efficient energy management solutions. 

By incorporating renewable energy sources like solar panels and wind turbines, the system lowers dependence on external power supply chains, reducing transmission losses associated with long-distance energy transport and minimising the need for large-scale energy infrastructure upgrades, which can have negative ecological impacts.

In case of grid failures, localised energy generation ensures a more reliable power supply, preventing business interruptions and economic losses and making the city less susceptible to disruptions in energy distribution caused by natural disasters or other crises.

Energy storage systems within the smart local energy network can store surplus energy during times of low demand and utilise it when needed, serving as backup power sources during emergencies. This capability ensures a consistent energy supply even if the main grid goes down.

Moreover, the system’s real-time data analytics and predictive capabilities enable better preparedness and response to energy demand fluctuations and potential supply interruptions. With smart meters and sensors in place, the system can swiftly identify and isolate faults, minimising downtime and accelerating restoration efforts.

Additionally, the integration of demand-response mechanisms empowers a city to regulate energy consumption during peak demand periods, reducing strain on the grid and preventing potential blackouts. This demand flexibility supports grid stability during critical situations.

These measures collectively enhance the city’s ability to withstand and recover from disruptive events, contributing to a more robust and adaptable urban infrastructure.

Empowering Homeowners: How to implement Smart Local Energy Systems for residential use

Introducing a smart local energy system to a homeowner’s property involves several key steps.

  1. Assessment and Planning: Begin by evaluating your energy needs, consumption patterns, and available renewable resources like solar potential. Consider your budget and long-term goals.
  1. Technology Selection: Choose suitable components for your system, such as solar panels, energy storage units, smart meters, smart appliances, and home energy management systems. Ensure compatibility and efficiency among your selected technologies.
  1. Regulations and Standards: Research local regulations, standards, and incentives for renewable energy installations. Obtain any necessary permissions before proceeding to ensure compliance with legal requirements.
  1. System Installation: Engage certified professionals to install your chosen technologies safely and efficiently. This includes developing renewable energy generation, connecting energy storage, and integrating smart meters and control systems.
  1. Integration and Monitoring: Ensure seamless communication between all components and set up monitoring systems to track energy generation, consumption, and storage. Smart home energy management software helps optimise energy usage
  1. Maintenance: Regularly maintain and service your system to maximise its efficiency and lifespan. Clean solar panels, check battery health, and update software as needed.
  1. Energy Management: Utilise smart features to optimise energy consumption, leveraging real-time data to make informed decisions about when to use, store, or sell energy.
  1. Adaptation: Continuously evaluate your energy system’s performance and consider upgrades or expansions to accommodate changing energy needs or advances in technology

By following these steps, homeowners can successfully introduce a smart local energy system, reducing energy costs, minimising environmental impact, and contributing to a more sustainable energy future.

Economic advantages of decentralisation: How Smart Local Energy Systems benefit local businesses

Smart Local Energy Systems offer significant benefits to local businesses, enhancing their operational efficiency, cost savings, and sustainability credentials.

Firstly, these systems enable businesses to generate their own energy through renewable sources. This self-sufficiency reduces reliance on the grid and shields businesses from energy price volatility, translating into consistent energy costs and budget stability.

By incorporating energy storage technology, businesses can store excess energy during low-demand periods and use it during peak times. This avoids high peak time charges and also presents an opportunity to establish a new revenue stream by exporting energy at times of peak grid demand (assuming your business has an excess supply of energy). 

Smart systems provide real-time energy data and analytics, allowing businesses to monitor consumption patterns. Such insights can empower business owners to identify areas of energy-waste, optimising equipment for maximum efficiency and implementing an energy-saving strategy do reduce ongoing operational expenses.

Moreover, these systems can enable businesses to engage in Demand Side Response initiatives, allowing them to adjust energy consumption based on real-time grid conditions, for which they can be financially rewarded.

Adopting green energy solutions also enhances a business’s environmental credentials, appealing to eco-conscious customers and stakeholders while contributing to the overall sustainability of the community.

Innovation Spotlight: Which breakthrough technologies are driving the development of Smart Local Energy Systems?

Developing a smart local energy system requires integrating a suite of advanced technologies for efficient energy generation, distribution, and management. 

Key technologies might include:

Renewable Energy

Technologies like solar panels, wind turbines, and heat pumps reduce reliance on fossil fuels and lower long-term carbon emissions.

Energy Storage

Batteries and other storage solutions capture excess energy generated during off-peak times so that it can be accessed later use during periods of peak demand, ensuring a secure energy supply.

Smart meters & sensors

Smart devices provide real-time data on energy consumption, enabling precise monitoring and control, and facilitating demand-response behaviours.

Communication infrastructure

Robust communication networks are essential for transmitting data between various technologies, allowing seamless coordination and control.

Energy management software

Energy management software monitors data from solar installations, thermostats and smart meters, using data analytics and predictive algorithms to forecast energy demand and optimise energy flows to ensure they work harmoniously. 

Demand-Response Technology

This technology allows consumers to adjust their energy consumption based on pricing signals or grid conditions, helping balance energy demand and supply.

Cybersecurity Solutions

With increased digital connectivity, robust cybersecurity measures protect the system from cyber threats and data breaches.

If you are interested in exploring the development of a smart local energy system for your street, neighbourhood, town or city, then please contact the BHESCo Projects Team:

Project Contact Form

If you are interested in working with BHESCo to develop a Smart Local Energy System in your area then please provide your details in the form below and a member of our Projects Team will get back to you to discuss next steps.