Platform Requirements for Smart Local Energy Systems

A key challenge for LEO and for SLES in general is creating a marketplace and local energy services where a range of actors can produce business models and value propositions that work for groups with low levels of capability to participate fully in a local system. Working with grid edge assets can be challenging and LEO remains determined on doing so for operational, social and environmental reasons. This document looks at the platform requirements necessary to support the development of these marketplace and local energy services, and how they can widen access to the marketplace and increase the participation of these small-scale assets.

However, if the transaction costs of widening access become too high, value propositions may be undermined, business models become non-viable, and take-up of participation in SLES could be stymied. To ensure that access to market is as widespread as possible, it seems that there will need to be a mix of market actors operating with different value propositions, some of which will not be structured around optimising financial returns, for example recycling a proportion of financial returns for community rather than shareholder benefit.

This document looks at the end-to-end delivery of different flexibility services (DNO-enabled and DNOprocured), while considering the commercial, technical and social requirements for building a local energy system using Market Platforms