40 new projects mark a significant ramping up of energy network innovation to help accelerate the transition to net zero at the lowest cost to consumers.
The projects will explore new ideas for gas and electricity networks, with the potential in the coming years to:
- benefit consumers
- help transform the UK’s energy systems in line with net zero targets.
The projects are the first to be given the go-ahead under Ofgem’s new Strategic Innovation Fund (SIF) partnership with Innovate UK.
They will receive up to £150,000 to carry out a two-month ‘discovery’ phase on their proposal to further explore their potential.
Addressing big challenges
The projects address some of the biggest challenges that energy networks face in the journey to net zero and focus on:
- zero emission transport
- data and digitalisation
- whole system integration.
The innovations being explored range from:
- technologies and approaches taken for the large-scale storage of heat
- circuit breakers enabling the increasing amounts of power from offshore wind turbines to be connected to the grid.
Keeping the lights on
The projects include Eye in the Sky, which investigates how satellite data can be used in emergencies such as flooding or wildfires to plan electricity grid repairs.
This keeps equipment and people safe and helps ‘keep the lights on.’
Other projects look at technologies linked to the future uses of hydrogen in our energy system including:
- helping electric vehicle charging cope at the busiest times using hydrogen
- testing new metallic coatings which will protect pipework from accelerated wear and tea
- the potential for using nuclear power to generate hydrogen.
There are also studies preparing for the transition to zero-emission transport, for example:
- looking at using hydrogen to power heavy-duty vehicles
- developing a toolkit to help planners understand how gas and electricity networks can help decarbonise rail transport.
Gas and electricity networks are working collaboratively with over 200 partners.
The networks submitted their proposals in a competitive process managed by Innovate UK, which is delivering the SIF in partnership with Ofgem.
Taking ideas forward
After the initial two-month phase those projects judged to have the greatest potential will be awarded up to £500,000 to take their ideas forward.
After this there will be a further selection process, with successful projects receiving more funding and able to carry out large-scale demonstrations of their technologies.
The ultimate aim is to develop transformative new SIF innovations that can be rolled out across all UK energy networks.
It will make them fit for the future and deliver benefits for both consumers and the planet.
Transitioning to low carbon energy
Neil Kenward, Ofgem Director for Strategy and Decarbonisation, said:
Innovation in the energy sector is crucial to help us transform the way we travel, heat our homes and fuel our industries at the lowest cost to consumers.
Ofgem set up the SIF to help accelerate a transition to low carbon energy, which is fair, affordable and inclusive for consumers.
We hope these 40 pioneering green projects will blaze a trail in innovation that will help us diversify our energy supplies, protecting consumers from future energy shocks as well as protecting the planet.
Shaping the future economy
Indro Mukerjee, Chief Executive of Innovate UK, said:
We’re very pleased to be working closely with Ofgem and the energy sector on the SIF, and pleased with its progress.
Innovate UK is committed to supporting the UK’s world-leading businesses and researchers to shape a sustainable and fair future economy.
Embracing new approaches
Matt Hastings, Deputy Director of the Ofgem SIF programme at Innovate UK, said:
The SIF aims to respond to the urgency needed to deliver net zero.
Launching 40 projects in parallel, involving 100% of the UK energy networks, shows we can embrace new approaches, move quickly, and take more calculated risks.
We strongly believe we can make the UK the best place in the world to be an energy consumer, and the best place in the world to be an energy entrepreneur.
Working together, we can use the SIF to help turn the UK into the ‘Silicon Valley’ of energy.
The SIF is a five-year programme with up to £450 million available to promote energy network innovation.
Ofgem and Innovate UK are working to identify further innovation challenges for round two of the SIF, working closely with all energy networks, network users and consumers.
Ofgem and Innovate UK will issue another call for proposals in the autumn of 2022.
Ofgem, the Office of Gas and Electricity Markets, is Britain’s independent energy regulator.
Its role is to protect consumers now and in the future by working to deliver a greener, fairer energy system.
It does this by:
- working with government, industry and consumer groups to deliver a net zero economy at the lowest cost to consumers
- stamping out sharp and bad practice, ensuring fair treatment for all consumers, especially the vulnerable
- enabling competition and innovation, which drives down prices and results in new products and services for consumers.
About Innovate UK
Innovate UK is the UK’s innovation agency and is part of UK Research and Innovation.
It drives productivity and economic growth by supporting businesses to develop and realise the potential of new ideas, including those from the UK’s world-class research base.
The purpose of the SIF is to:
- support network innovation that contributes to the achievement of net zero, while delivering real net benefits to network companies and consumers
- to work with other public funders of innovation so that activities appropriately funded by network consumers are coordinated with activities funded by government.
Ofgem is working with Innovate UK to deliver the SIF.
The partnership brings together the complementary roles of both organisations.
Ofgem regulates network and system operators to enable net zero at lowest cost to consumers.
Innovate UK focuses on business growth and is delivering the SIF using its expertise in engaging with innovators on funding programmes across multiple sectors such as:
- offshore wind
- energy storage
Ofgem has determined that the value of the SIF will be £450 million over the next network price control period (‘RIIO-2’).
The level of funding available can be increased upwards if there is a need for greater funding.
It will issue regular challenge competitions focused on areas of strategic importance to the future of the gas and electricity networks.
Under the SIF, gas and electricity network and system operators are able to form consortia with businesses and academics to propose innovative solutions to the challenges facing the networks.
They can then apply for funding through the competitive process.
The SIF is drawn from the bills that energy consumers pay, and so all projects funded will be required to bring a net benefit to consumers.
Three ‘agile’ stages
Projects are funded progressively in three ‘agile’ stages (discovery, alpha and beta) to ensure focus on the right areas and minimise risk.
This will help the projects to develop rapidly, react to change and maximise their potential to transform the gas and electricity networks.
They will also grow large-scale successful businesses and contribute to UK economic growth.
The first competition under the SIF, the discovery phase of round one, opened in August 2021 and closed in November 2021.
Projects under this competition had to be led by:
- gas transmission operators
- gas distribution operators
- electricity transmission network operators, or
- the electricity system operator.
Projects will also work in collaboration with other networks, businesses, and academics.
Distribution network operators (DNOs) could partner with these organisations prior to being allowed to lead SIF projects themselves from 2023. This is when RIIO-ED2 (the five-year price control period for the DNOs) starts.
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