The Strategic Innovation Fund opened applications last week to support a greener approach to energy network innovation. The fund is part of Ofgem’s RII02 price controls for the electricity system operator and the network companies that operate Great Britain’s energy pipes and wires.
The fund will be approved by Ofgem and managed in partnership with Innovate UK. The goals for the new fund are to keep bills as low as possible, drive the UK towards its goal of net zero greenhouse gas emissions by 2050, and help turn the UK into the leader of energy innovation.
Ofgem is Britain’s independent energy regulator; one of its goals is to deliver a greener, fairer energy system, and enable competition and innovation, driving down prices resulting in new products and services for consumers. Innovate UK is the UK’s innovation agency. It drives productivity and economic growth by supporting businesses to develop and realise the potential of new ideas.
Initially, the fund will count with £450 million over the next five years, with the option to increase in response to need and if innovators bring forward strong plans. The Strategic Innovation Fund is drawn from the bills that energy consumers pay, and so all projects funded will be required to bring a net benefit to consumers.
In order to apply for the first round of funding, network companies must address four important strategic challenges for the energy transition, these being whole system integration, data and digitalisation, heat and transport.
According to Ofgem’s website “Projects could range from ensuring the networks are ready to roll out clean heating solutions such as heat pumps to Britain’s homes to developing ways for network companies to work together across transmission, distribution, system operation, gas and electricity. Projects could also include developing new technologies for networks to support flexible energy solutions, such as battery storage technology, to ensure electricity is used and stored more effectively, thereby bringing down bills and emissions. Ideas need to be big, bold and ambitious with potential to scale across the networks upon completion.”
Energy Minister, Lord Callanan at the Department for Business, Energy and Industrial strategy, said “The Strategic Innovation Fund will ensure the best projects and most talented minds have the grants available to reduce carbon emissions and enable bill payers to see the benefits of building back greener.”
The projects are to be funded progressively in three stages: discovery, alpha and beta. This will turn focus onto the right areas and minimise risk, as well as 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. Projects must 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.