Ofgem awards £44.6m to six smart grid projects

Ofgem has awarded £44.6 million of funding to six projects aimed at developing smarter energy grids.

Of the eight that entered the regulator’s annual Network Innovation Competition (NIC), four power and two gas network projects were successful.

“Britain’s networks will play a crucial role as we head towards a smarter energy system,” said senior partner for networks Jonathan Brearley. “This year’s trials will test a variety of new technologies and arrangements.

“If they are successful they will provide networks with valuable learning that may be incorporated into their everyday working practices, providing financial and environmental benefits to consumers.”

The projects involve:

• Examining whether distribution-connected generators can provide services to the transmission network such as voltage stability which have traditionally been provided by larger generators. The project will also test whether distribution network operators can work more closely with National Grid to manage power grids (National Grid Electricity Transmission – £8 million).
• Helping smaller generators to connect to the power network in places like London by using new types of circuit breakers to reduce the number of faults (UK Power Networks – £4.6 million).
• Using cloud-based software to help communities make better use of locally connected renewable generation (Western Power Distribution – £4.9 million).
• Trialling new equipment for regulating frequency and voltage on the grid in response to variable output from wind farms (Scottish Power Transmission – £15.6 million).
• Testing whether hydrogen can help to decarbonise gas networks by blending natural gas with 10 to 20 per cent hydrogen on Keele University’s gas network (National Grid Gas Distribution – £6.8 million).
• Developing a new billing system which is able to take account of the fact that ‘greener’ gas such as biomethane produces different volumes of energy when compared to North Sea gas (National Grid Gas Distribution – £4.8 million).

The first of the above projects will see National Grid and UK Power Networks spend a total of £9.5 million on a “regional power market trial”, which will be the “first step” towards a distribution system operator (DSO).

The “pioneering whole system approach” will help networks in the South East to absorb new storage and the large volumes of distributed renewable generation which are becoming “more of a feature in today’s electricity network.”

By reducing the need for network reinforcement, it is hoped it will save consumers in the South East up to £1 million by 2020 and £29 million by 2050. “If successful, the regional power market model could be introduced to 59 other sites and potentially save up to £412m for UK consumers by 2050,” said National Grid.

It will also provide new revenue streams to renewable energy generators, which will be able to offer their services to National Grid’s system operator via UK Power Networks’ DSO platform.

The NIC replaced the Low Carbon Network Fund last year as part of the RIIO price controls.