Tensions are evident in energy policy objectives between centralised top-down interconnected energy systems and localised distributed approaches Examination of these tensions indicates that a localised approach can address a systemic problem of interconnected systems; namely vulnerability. The challenge for energy policy is to realise the interrelated goals of energy security, climate and environmental targets and social and economic issues such as fuel poverty, whilst mitigating vulnerability. The effectiveness of conventional approaches is debatable A transition to a low carbon pathway should focus on resilience, counter to vulnerability. This article draws from on-going work which evaluates the energy aspects of a Private Finance Initiative (PFI) project to refurbish and re-build a local authority's entire stock of sheltered accommodation to high environmental standards Initial findings suggest that whereas more conventional procurement processes tend to increase systemic vulnerability. a user focussed process driven through PFI competitive dialogue is beginning to motivate some developers to adopt innovative approaches to energy system development (C) 2010 Elsevier Ltd All rights reserved