This paper analyses the role of niche innovation and regime interaction in the field of renewable energy in the UK. Adopting a co-evolutionary approach and a dynamic multilevel perspective on system innovation, it investigates niches development in the UK in the field of bioenergy and its interaction with the current energy regime. Contributing to the debate about spatial scales at which sustainability transitions can be conceptualized, the paper utilizes the case of niche development in the region of Wales to provide supporting evidence of the importance of context-specific social and political relations that may foster or hinder regime transformation.