A bumper crop of cutting-edge projects have received funding. The projects aim to help deliver a future power grid that is both more secure and cleaner while also turning Great Britain into a growth hub for energy entrepreneurs.
Energy regulator Ofgem and Innovate UK have announced a batch of 53 projects that will each receive up to £150,000 from the Strategic Innovation Fund (SIF). SIF is a five-year programme introduced in 2021 to help spearhead the shift to a lower carbon future across the gas and electricity networks, in line with the government’s net zero objectives.
Innovate UK has estimated that all the innovation projects submitted to SIF will deliver cost savings in the billions of pounds over the next 10 to 15 years. These projects will benefit consumers and cut millions of tonnes of carbon dioxide emissions.
Transforming the energy system
The latest 53 chosen projects explore new ideas with the potential to help consumers and transform the energy system in the coming years.
The projects, currently in the conceptual phase, are being led by energy network companies working in partnership with innovators and partner organisations.
Concepts are targeted at tackling some of the greatest challenges facing the energy system and society, including:
- the development of large-scale battery storage, which will be needed in a grid that utilises intermittent renewable energy sources such as wind and solar power
- helping speed up connections of wind and solar power to the grid and improving the efficiency of green hydrogen production while also making the most of existing energy infrastructure
- supporting a ‘just energy transition’ including helping consumers who may be disadvantaged, fuel-poor, living in vulnerable circumstances or off the gas grid reduce their heating and transport emissions
Exploring new concepts
Concepts being explored include:
- using electric vehicles to rapidly restore power to the vulnerable such as those reliant on dialysis machines during power cuts
- looking at how an entire terraced street could be decarbonised using an affordable smart local energy system
- looking at how wind farms, instead of fossil fuel generators, could be used to restore the grid following a blackout. This is something not currently possible
- whether hydrogen production costs could be cut by using wastewater rather than pure water
Securing our energy future
The projects are being given up to three months to further explore and develop their concepts and assess their potential and prepare plans for future phases.
Each project will then be assessed by a panel of SIF judges. Projects judged to have the greatest potential will then be awarded up to £500,000 for a further six-month proof of concept phase, which would start in the summer. This will be followed by a third phase, whereby the remaining projects will compete for funding to demonstrate prototypes starting in early 2024.
The projects that ultimately are commercially developed could start to be rolled out operationally into energy networks in the mid to late 2020s. And they will play an important part in helping Great Britain achieve a cleaner, cheaper and more secure energy future.
Power solutions of tomorrow
Neil Kenward, Ofgem Director for Strategy and Decarbonisation said:
Great Britain has a long history of being in the vanguard of innovation. Our work with Innovate UK is empowering today’s innovators and helping establish Britain as an entrepreneurial energy innovation hub developing and delivering the power solutions of tomorrow.
This will help in the quest to transform our energy systems at pace and boost supplies of clean and secure energy at the least cost to consumers and ensure that no one is left behind.
Decarbonisation of energy networks
Mike Biddle, Executive Director for Net Zero at Innovate UK, said:
Our vision is for the UK to prosper from being the economy that transitions fastest to net zero. We’re delighted to be working closely with Ofgem and the energy sector on the Strategic Innovation Fund, and to see a new cohort of innovative projects coming through that will help drive the decarbonisation of our energy networks.
Learning and taking risks
Matt Hastings, Deputy Director of the Ofgem SIF programme at Innovate UK, said:
As projects from our last year’s challenges move closer towards their demonstration phase, and real-world deployment, we’re kicking off the next batch of Discovery projects in parallel.
Discovery is all about urgent learning and taking risks; we expect a degree of failure. This ensures that only the best ideas make it through to the next phases, with the amount of projects reducing as the level of consumer investment in SIF projects increases.
Further information
This is the second round of feasibility study projects under the Ofgem SIF, which was launched in 2021 and is delivered through a partnership with Innovate UK.
Ofgem
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
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 SIF is to:
- support network innovation that contributes to the achievement of net zero, while delivering real net benefits to network companies and consumers
- work with other public funders of innovation so that activities appropriately funded by network consumers are coordinated with activities funded by government
SIF
Ofgem is working with Innovate UK to deliver SIF. The partnership brings together the complementary roles of both organisations.
Ofgem has determined that the value of SIF will be £450 million over the current 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 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.
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.
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 while growing large-scale successful businesses and contributing to UK economic growth.
The first competition under SIF, the discovery phase of round one, opened in August 2021 and closed in November 2021.
Projects had to be led by gas transmission, gas distribution, or electricity transmission network operators, or the electricity system operator, working in collaboration with other networks, businesses and academics.
For the discovery phase of round two, distribution network operators (DNOs) can also lead SIF projects themselves under RIIO-ED2 (the five-year price control period for the DNOs).
The projects in the round two discovery competition have to address one of the four round two challenges identified by Innovate UK and Ofgem following consultation in mid 2022:
- supporting a just energy transition
- preparing for a net zero power system
- improving energy system resilience and robustness
- accelerating decarbonisation of major energy demands
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