A critical overview of local energy communities: State-of-the-art, real-life applications & challenges and tackling the academia-industry gap

The transition from a centralized to a decentralized energy network has grown significantly. As a result, bidirectional energy platforms for consumers and producers have been established. In support, technological advancement in distribution networks is carried out, encouraging local consumers to participate in energy production, leading to the emergence of LECs, empowering them to captivate, generate and share renewable energy. A comprehensive review of LECs is presented in this paper, addressing their operational characteristics, control strategies, market interactions, regulatory frameworks, and real-world implementation challenges. Moreover, the paper provides the technical challenges related to grid integration, economic, and regulatory policies associated with peer-to-peer interaction are some of the hindrances in deploying a successful LEC strategy. The paper identifies a critical gap between the academic and real-world environment that can be bridged through realistic assumptions, adaptive control strategies, and measurements of cyber threats. Additionally, pilot projects are assessed to understand the feasibility and impact of LECs in real-world environments. This study proposes the requirements for establishing advanced network and monitoring technology, dynamic pricing strategy, and revised regulatory policies for the successful implementation of the LEC strategy. • Comprehensive review of Local Energy Communities (LECs). • Bridges academia-industry gap in energy management. • Analyzes real-world LEC applications and challenges. • Proposes solutions for policy and technology integration. • Provides a roadmap for future LEC research and development.