  A whole-system, investment-optimising model has been used to examine the
change in total cost of meeting demand for electricity when Smart Local Energy
Systems (SLES) are deployed. Our assumption is that SLES, alongside their other
features, enhance the flexibility of electricity consumption through
demand-side response (DSR) and facilitate use of local energy storage. We find
that with the flexibility of SLES present, variable renewables such as offshore
wind can displace firm but more expensive low-carbon sources such as CCS.
Considering a 100 gCO2/kWh emissions target in 2030, a 10% penetration of SLES
could reduce total costs by {\pounds}1.2bn/year relative to no SLES, while at
higher penetration of 50% SLES, savings increase twofold to
{\pounds}2.8bn/year. Under a more stringent emissions limit of 25 gCO2/kWh in
2040, the savings rise to {\pounds}2.9bn/year for 10% SLES uptake and rise
threefold to {\pounds}8.7bn/year at 50% uptake. These results hold for costs of
enabling DSR of less than {\pounds}100/kW and it is not until an unlikely
{\pounds}5,000/kW that the savings are nullified. The savings from substituting
wind for CCS remain substantial even if the anticipated reduction of cost of
wind in 2040 does not materialise. Cost savings from the flexibility provided
by SLES are affected by realisation of domestic DSR through other means. A 20%
uptake level of non-SLES DSR in 2040 still allows SLES to create cost savings
of {\pounds}6.8bn/year at 50% penetration (a 20% fall from
{\pounds}8.7bn/year).
