Networks awarded funding for 40 innovation projects

Energy networks have been awarded nearly £4.6 million from Ofgem’s new Strategic Innovation Fund to develop their proposals for 40 innovation projects.

Each project will receive up to £150,000 to explore their potential as part of a two-month “discovery” phase. Those judged to have the greatest potential will subsequently be awarded up to £500,000 for further development ahead of a third selection process to determine which projects will receive funding for large-scale demonstrations.

The £450 million Strategic Innovation Fund has been introduced to replace the Network Innovation Competition as part of the RIIO2 price controls.

The fund is intended to address major strategic challenges for the sector. The 40 projects awarded grants will address four key challenges: whole-system integration (11 projects), data and digitalisation (17 projects), heat (5 projects) and transport (7 projects).

The innovations being explored include the large-scale storage of heat, new circuit breakers to facilitate the connection of offshore wind farms to the power grid, the use of satellite data to plan repairs during emergencies such as flooding and wildfires, new metallic coatings to protect pipework from wear and tear, and the production of hydrogen using nuclear power.

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 Strategic Innovation Fund 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.”

Ofgem has awarded the funding in partnership with Innovate UK. Matt Hastings, deputy director of the Strategic Innovation Fund programme at Innovate UK, said: “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 Strategic Innovation Fund to help turn the UK into the ‘Silicon Valley’ of energy.”

There are 15 electricity transmission projects – nine led by SP Energy Networks and three each by Scottish and Southern Electricity Networks and National Grid Electricity Transmission.

National Grid Gas Transmission has been awarded grants for 10 projects, whilst National Grid Electricity System Operator will receive funding for two.

Grants have also been allocated to 13 gas distribution projects – six led by SGN, five by Northern Gas Networks and one each by Cadent and Wales and West Utilities.

Antony Green, hydrogen director at National Grid Gas Transmission, said: “The scale of the net zero challenge is significant. As a team in gas transmission, we really embraced the SIF process and submitted a number of well-rounded project proposals that are central to overcoming this challenge.

“I’m delighted that we have received funding for 10 projects. These will all help demonstrate how we will transition from the National Transmission System of today to the gas network of the future.”

Alexander Yanushkevich, innovation manager at National Grid Electricity Transmission, added: “These ambitious, innovative projects have the potential to shape the future electricity network, accelerating the transition to net zero at the same time as delivering significant benefits to consumers.

“The most successful of the feasibility study projects can go on to receive further funding and we look forward to taking each project forward and helping these new technologies become a reality.”

Ofgem said it is working with Innovate UK to identify further innovation challenges for the second round of the Strategic Innovation Fund and will issue a call for proposals in the autumn of 2022.