The Smart Hub SLES project will take place in West Sussex and will aim to integrate energy management across council housing, private residential properties, transport infrastructure and commercial properties.
Flexitricity will help deliver a leading-edge demonstrator project aimed at jump-starting the energy revolution.
The first of its kind project will mean greener and cheaper energy for local communities.
The proposed project will deploy a number of innovative technologies, including a hybrid hydrogen/electric vehicle filling station and mesh networks for power management, alongside more established but not widely deployed technologies such as heat networks.
Flexitricity will use its demand-response expertise to establish a virtual power plant which can dynamically monitor and respond to energy demand and generation.
This will also involve designing a platform which could be widely replicated and enable public sector organisations to adopt flexible energy assets and participate in local flexibility markets.
Advanced Infrastructure will lead the project, with further partners including Connected Energy, Honda Motor Europe, ITM Power, ICAX, Moixa Technology, Passiv- Systems, Switch2 Energy, The Carbon and Energy Fund and West Sussex County Council.
The project is one of four UK smart energy systems demonstrator projects that have been announced by Energy and Clean Growth Minister Claire Perry.
The demonstrator will show how businesses can develop local clean energy approaches at scale that will create better outcomes for consumers and promote economic growth for the UK.
By bringing together the best research and expertise, the initiative aims to transform the way energy is delivered and used, whilst proving that smarter local energy systems can deliver cleaner and cheaper energy services.
Funding for the project has been awarded competitively by UK Research and Innovation, the new organisation that brings together the UK Research Councils, Innovate UK and Research England.
Flexitricity has pioneered the demand-response industry, generating over £20million for its energy partners since its launch in 2004. It is the first supplier in the UK to provide full, active participation in the Balancing Mechanism for demand response assets.
The Edinburgh-headquartered business now has over 450 MW under management - a virtual power station helping the National Grid meet the energy demands of the UK.
Neil Oloughlin, project leader at Flexitricity, said: "We are very excited to be working on this exciting project which will bring further momentum to the energy revolution.
"Flexible energy will be an essential element of the UK's energy mix when carbon generation falls off the grid by the mid-2020s.
"There is a huge opportunity for local community generation projects to create sustainable revenue streams and take advantage of the National Grid's need for flexible power.
"From this perspective we can't wait to get started on the demonstrator project which will aim to create an intelligent local energy system that has the potential to re-energise and bring investment to communities across the UK."
Flexitricity created and now operates the first, largest and most advanced demand-response portfolio in GB and has unsurpassed knowledge of the market and its requirements.
Headquartered in Edinburgh, Flexitricity partners with businesses throughout Great Britain to provide reserve electricity to National Grid. The word "Flexitricity" means "Flexible Electricity". The company looks for flexibility in electricity consumption and generation, creating revenue for energy users and generators as well as reducing national CO2 emissions and helping to secure energy supplies.
Their team is fully engaged at industry and regulatory level and has a track record that demonstrates innovation and delivery success.
Flexitricity is part of the Alpiq Group, a leading Swiss electricity and energy service provider with a strong presence across Europe.