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

Fabián Fuentes González*, Janette Webb, Maria Sharmina, Matthew Hannon, Timothy Braunholtz-Speight

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

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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.
Original languageEnglish
Article number103915
JournalEnergy Research and Social Science
Volume119
Early online date29 Dec 2024
DOIs
Publication statusPublished - 1 Jan 2025

Keywords

  • Smart local energy systems
  • Asset securitization
  • Corporate governance

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