In a Local Energy Network multiple houses, apartments or office buildings are connected into a energy cluster. Within the LEN, energy can be exchanged freely to maximize the efficiency of the local energy systems. The LEN is the technical foundation of a Local Energy Company; the cables and pipes in the ground and walls. LEN's can exist for electricity, heat, cold and (bio)gasses.

Sharing capacities
Sharing energy with other members optimizes the efficiency of your system. For instance, at noon both your solar panels and wind turbines are probably producing a lot of electricity. However, because you're at work, normally nobody would be using any and so the power would be sold back to the grid. By using the subtle differences in consumption profiles between members, surplus capacity for one member can be filling up shortages at another member. And an hour later the situation could be reversed.

Connection to the utility grid
A Local Energy Network is basically a mini-grid that is often also connected to the utility grid through one connection (although his is not a requirement). Therefore, electricity can first be exchanged between the cluster members before surplus capacities are sold back to the grid. Of course, when the cluster as a whole isn't producing enough energy, then additional energy will be brought in through the grid.

Legal issues
Local Energy Networks are frequently not government-owned. Depending on the country, the legal situation and treatment of Local Energy Networks varies and it is important to asses the situation at the earliest stage possible when thinking of a Local Energy Company.