Driven by the net-zero target, the UK has made preliminary success in distributed energy development and community energy construction, while gradually advancing the establishment and operation of local markets. Against this background, this paper first systematically reviews the UK’s energy structure and reform pathways of its electricity market, and analyzes relevant policies supporting energy localization. It then delves into the key processes of energy localization development in the UK, focusing on local market design concept and interaction mechanisms between local markets and upper-level markets. Finally, by analyzing typical UK community energy projects and successful local market operation cases, this paper summarizes the lessons that can be drawn for China’s energy localization initiatives.