Local onsite generation is key to a net zero future, the ADE says, advocating for smarter, more flexible energy systems supported by government and Ofgem. The association predicts that the traditional centralised approach will be replaced by a smart, user-led system, with local energy and consumers at the heart.

It argues that the way to achieve this future energy system is through on-site flexibility and energy storage, energy efficiency, implementation of heat networks and on-site combined heat and power systems.

The ADE points to estimates made by the National Infrastructure Commission that reducing peak demand through energy management by 5% would reduce power system costs by £200 million each year and give consumers £790 million a year in added benefits.

And that peak power demand could be reduced by up to 15% if the UK achieves comparable levels of flexibility to other markets such as Australia and the US.

It is now calling on the government and Ofgem to support this through opening up access to markets to ensure payment for local generation and flexibility, for example through changing the timings of energy use, storage or demand flexibility.

Lord Deben, chair of the Committee on Climate Change, said local onsite generation and energy management will play “a central role” in achieving net zero.

“Giving customers the power to help drive the UK’s low carbon transition is vital and we need credible UK policies, across government, that inspire a strong response from business, industry and society as a whole.”

Tim Rotheray, director of the ADE, said now is the time to focus on the role of local energy.

“If government puts customer-led energy at the heart of its policy making and works alongside business, we can put power back into the hands of customers and meet our net zero in a fair way.”