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LEMA: Unlocking the benefits of Local Energy Systems

10th Apr, 2024

The Local Energy Markets Alliance (LEMA) is a pioneering business-led initiative to develop a commercially viable market for consumer-facing Local Energy Systems (LES).

The energy transition is placing an increasingly complex burden on the grid leading to growing congestion and politically unacceptable connection queues.

LES trials have demonstrated the technical ability to mitigate this congestion.  What is needed now are the market structures to deliver commercially viable LES at scale.

This initiative will enable our industry to step up to collectively ‘simplify the energy burden and unlock commercial growth’. It is about us taking action now.

LEMA was established by Gemserv, a Talan Company and The Traxis Group Ltd to drive forward the wide-scale benefits of LES as a part of the broader field of distributed energy and flexibility.

The scaled deployment of LES holds significant potential to deliver flexibility to the grid, alongside the benefits and energy security offered through local energy independence.

However, the realities are that, for LES to be viable, long term, they are still yet to be evidenced as commercially sustainable across the value chain; chiefly falling short of providing a compelling customer proposition, giving wide-spread confidence to investors, and the operational certainty of mitigating local congestion.

We recognised that for LES to thrive, the foundational elements of a viable, structured ‘market’ are required, where the broad organisations and stakeholders that sit across the value chain could coalesce, finding confidence through the development of common approaches, frameworks, templated agreements and considered business models. Without these, it could be the case that LES struggle to break out their confinement to localised projects and trials.

LEMA seeks to achieve its goals and objectives through the collaboration of like-minded organisations across GB and Europe. LEMA invites interests from across the market, including commercial companies, facilitators, not-for profits and representatives of key market functions, to join as members, coming together to deliver its collectively agreed work-plan.

The organisations involved with LEMA represent broad interests in the value chain for Local Energy Systems, including:

  • DNO/DSOs & IDNOs
  • Property Developers
  • Aggregators and Flexibility Service Providers
  • Energy Retailers
  • Financial Entities
  • Energy Consultancies
  • Community Representatives
  • Local Authorities
  • Not-for-Profit Market Facilitators
  • Law Firms
  • Service Equipment & Platform Suppliers.

LEMA additionally welcomes engagement from government and regulatory bodies, but central to our approach, we do not seek to rely upon centralised facilitation, rather focussing on a business led and market approach to progressing opportunities in LES.

Working with these stakeholders, LEMA has established its headline work-plan to achieve commercially sustainable and scalable LES.

The key focus areas are to:

  • Generate an Enterprise Market – Generate the integrated propositions & business models to maximise and share value.
  • Facilitate Business Integration – Formalise the frameworks, agreements and other documentation to underpin commercially viable LES.
  • Support a Local Perspective – Address practical issues of implementing, learning and improving upon LES approaches.

LEMA and its members aim to develop the LES propositions across 2024, move towards the development of common structures and contractual frameworks across 2025, seeking to prove approaches in the market through live LES deployments by 2026.

LEMA has benefited from being formalised as an organisation and has successfully onboarded founding members that are playing a critical role in shaping the detailed workplans aimed at achieving the integrated propositions, enhanced business models, baselined frameworks, agreements, contracts and policies necessary to deliver commercially sustainable and scalable LES.

Visit the LEMA website, or to read the LEMA brochure.


This article was first published in the April edition of the Energy Manager Digital Magazine.

Authors

Gavin Beresford

Principal Consultant

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