Financing smart local energy systems : A conceptual framework and research agenda

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Fuentes González, Fabián and Webb, Janette and Sharmina, Maria and Hannon, Matthew and Braunholtz-Speight, Timothy (2025) Financing smart local energy systems : A conceptual framework and research agenda. Energy Research and Social Science, 119. 103915. ISSN 2214-6296 (https://doi.org/10.1016/j.erss.2024.103915)

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Abstract

Smart local energy systems (SLES) are expected to contribute to meeting net zero carbon emission targets, as well as enabling energy decentralisation, democratisation and digitalisation. There are, however, unresolved questions about finance. We extend the existing corporate governance and risk management model CLASS to a new CCLLASS model. The model is used to explore pathways to SLES investment through securitising future cash flows. Case study evidence is used to explore governance and risk management practices suited to building investor confidence in securitisation. Several governance and risk management measures already in place support implementation and operation of securitisation, and should strengthen investor confidence. There is however scope for improvement in several elements, including final market architecture and explicit characterisation of benefits to localities. Further research is needed to test feasibility of a SLES future cash flow securitisation mechanism, including quantitative asset aggregation and systematic comparison of securitisation and other financial instruments.

ORCID iDs

Fuentes González, Fabián, Webb, Janette, Sharmina, Maria, Hannon, Matthew ORCID logoORCID: https://orcid.org/0000-0002-7811-3991 and Braunholtz-Speight, Timothy;
CORE (COnnecting REpositories)