Ofgem awards £6.1m to innovation projects

Ofgem has collectively awarded 53 projects more than £6 million in the latest round of its Strategic Innovation Fund (SIF), the regulator and Innovate UK have announced.

The SIF is a five-year scheme which was launched in 2021 and it is designed to fund innovative projects by gas and electricity networks which contribute to net zero, while delivering net benefits to their customers. It is expected to invest £450 million by 2026.

Last year Ofgem set four key challenges as part of round two of the SIF; supporting a just energy transition, preparing for a net zero power system, improving energy system resilience and robustness, and accelerating decarbonisation of major energy demands.

A total of 65 applications were received across the four innovation, with Ofgem deciding it will fund 53 of them.

The majority of the funding (£2.4 million) has been awarded to the 21 projects focused on the improving energy system resilience and robustness challenge, while just over £2 million has been awarded to 17 schemes focused on the accelerating decarbonisation of major energy demands challenge.

Elsewhere, nine projects for the preparing for a net zero power system challenge have been given almost £976,000 and six projects have been given £659,000.

Among the companies which have been successful in the latest round include National Grid, which has been granted almost £1 million to fund eight projects.

Its electricity transmission business has been awarded £396,000 for three projects that will help develop a net zero electricity network, including investigating technology to increase power flow capability on existing overhead lines, development of a long-term strategy to remove electrical insulating gas sulphur hexafluoride (SF6) from the network, and a project to assess whole energy system resilience.

National Grid Electricity Distribution meanwhile has been awarded £500,000 for five projects, one of which will investigate using electric vehicles to help restore power supplies to vulnerable customers during a power cut.

The other four will explore the impact of thermal energy efficiency on network loads, the use of digital solutions to support regional network planning, flexibility opportunities across different utilities and the role of digital technologies in developing a local smart energy system.

Meanwhile UK Power Networks has been granted funding for 15 new projects which cover a number of different areas such as decarbonising heating and the development of hydrogen electrolyser hubs.

Ian Cameron, director of customer service and innovation at UK Power Networks, said: “This funding is a testament to the remarkable impact our team have delivered up until this point, and a show of strong belief from Ofgem that we can continue to drive the transition to net zero as seamlessly as possible for our customers.

“The funding is connecting us with even more independent innovators. We’ve already witnessed the remarkable benefits of working with the industry to develop new products and are excited to engage with new parties looking to make an active difference in the electricity sector.”

During the discovery phase the 53 projects will be given up to three months to develop their concepts. Projects judged to have the greatest potential will then be awarded up to £500,000 for a further six-month proof of concept phase. The third phase will see the remaining projects compete for funding to demonstrate prototypes starting early next year.

Those which are then commercially developed could start to be rolled out into energy networks in the “mid to late 2020s”.

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.”

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.”