A modern organisational and technological structure of the energy sector emerged due to the development of distributed energy improving the reliability, efficiency and environmental friendliness of regional power supply systems. The study aims to substantiate the economic benefits of integrating smart local energy systems (SLES) based on distributed energy into regional power supply systems. Using heuristic and theoretical methods, the article explores the genesis of SLES and reveals factors that spur their development in regions. Analysis of empirical data from the implemented SLES projects revealed the accelerating pace of adoption of distributed energy by various regional economic sectors, allowing us to estimate the effects. Municipal smart local energy systems have a priority over those in agriculture and manufacturing, since their integration generates systemic effects significant for the region. These effects include increased availability of energy at socially acceptable prices, reduced cross-subsidisation, flexible energy supply through the use of smart technology, and better conditions for small and medium-sized enterprises. A key factor limiting the implementation of SLES projects is an underdeveloped institutional environment, which could be improved by changing the current rules of the wholesale and retail markets of electricity and capacity. In particular, it might be expedient to include SLES in regional energy systems in order to justify changes in the regulatory framework. The paper presents a comprehensive examination of the properties and characteristics of smart local energy systems and suggests ways to obtain useful economic effects in the development of regional power supply systems. As for the practical value, the research emphasises the appeal of SLES to investment companies and outlines conditions for a region’s sustainable development. © 2023 Institute of Economics, Ural Branch of the Russian Academy of Sciences. All rights reserved.