The EnergyREV Consortium’s purpose is to drive the transition to Smart Local Energy Systems (SLES) in the UK, through research and innovation. The consortium supports the broader Industrial Strategy Challenge Fund’s programme on Prospering from the Energy Revolution through its activities in 6 key Themes:
- Developing Systems Understanding
- Scale-up support
WP2.1: Local Energy System Businesses and Financial Practices (Business)
Innovative local energy businesses are aiming to benefit communities, customers and the environment by supplying clean, affordable and flexible energy to a mix of households, businesses and public facilities. New business models are required, including energy services customised for different groups and sectors; peer-to-peer energy trading; and, municipal and community energy.
The types and success of UK local energy systems’ businesses have not been analysed systematically until now. Decentralised energy supply has been limited since nationalisation and centralisation in the 1950s, followed by privatisation in the 1990s. Discovery of oil and gas in the North Sea also led to 1960s public development of the UK’s extensive gas grid, and a comprehensive programme for connecting most buildings. Centralising the energy sector created economies of scale, but neglected the opportunities for efficiencies from regional and local combined heat and power supply systems and energy service business models. The result is system and market structures geared towards big energy supply businesses.
This research aims to establish the scale of the existing local energy business sector, its installed capacity, and market share. We will explore where local energy businesses have developed across different geographical areas of the UK, and why: is it for example because of local political will, local renewable resources, constrained distribution networks, financial opportunity or all of these and more? The analysis will support the development of an innovative sector, with the potential to scale up in more locations and thrive.
The WP 2.1 outcomes are expected to be:
● Synthesis and analysis of empirical data on, and mapping of, UK local energy businesses and finances
● Taxonomy of UK local energy business and financial structures
● Appraisal of new LES business and financial models to address the challenges of changing climate, technologies, markets and governance.
The research conducted by Tyndall Manchester combines qualitative and quantitative social science methodologies. It includes: standard methods of literature search and review; a systematic review of global SLES, classification, synthesis and analysis under the triple Business Model Canvas framework; potential telephone and online survey of local energy business developments, selected interviews of sector experts to address gaps in existing data; cluster analysis techniques used to identify patterns and groups/clusters in unstructured data to examine types of business models; use of the triple Business Model Canvas technique to co-design new business models through cross-sector collaborative workshops.
Professor Janette Webb (University of Edinburgh)
Dr. Maria Sharmina (Tyndall Manchester)
Dr. Matthew Hannon (University of Strathclyde)
Dr. Fabián Fuentes González (University of Edinburgh)
Dr. Dimitrios Pappas (Tyndall Manchester)
Dr. Tim Braunholtz-Speight (Tyndall Manchester)