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Ofgem Strategic Innovation Fund (SIF) allocates £16 million to 36 ‘ground-breaking’ net zero projects
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Energy regulator Ofgem says 36 ‘ground-breaking’ projects have successfully secured a total of £16.09 million of next phase funding, as part of its SIF Round 2 Alpha competition process.

The Round 2 Alpha projects are led by energy network companies working in partnership with innovators and partner organisations. The successful projects will now take their initial ‘Discovery’ feasibility work to the next level, proceeding to ‘Alpha’ where they have up to £500,000 each to develop their concept in depth.

The SIF collaborates with network operators, industry, and academia to identify the most pressing challenges, providing strategic direction and focus to identify and drive the highest-potential projects and bring them to reality. The Round 2 Alpha projects are addressing some of the biggest challenges faced by the energy networks as they make the move to net zero:

  • How do we transition to net zero in a way that is just and fair for all parts of society?
  • How does Great Britain repurpose its energy systems to move safely and efficiently from fossil fuels to renewable energy?
  • As energy systems become more complex, how do we deal with increasing natural risks and other hazards?
  • How do we achieve government and industry targets for decarbonisation of major energy demands at the lowest cost to consumers, including the use of heat pumps in homes, and the move to electric vehicles?

Upon completion of the Alpha phase, projects will compete for third phase ‘Beta’ funding to produce demonstrator prototypes. The projects are aiming to go onto commercial development and could be implemented operationally in energy networks as early as the mid 2020s. They will play an important part in helping Great Britain achieve a safe, clean, low-cost energy future.

Marzia Zafar, Deputy Director of Digitalization & Innovation at Ofgem, said: “Innovative solutions that deliver resilience, reliability and affordability at pace are essential in achieving Great Britain’s target of clean power by 2035. This latest funding round will help innovators develop their ideas further and deliver the transformative technologies needed to drive forward the energy transition at least cost to consumers.”

One of the projects to be awarded funding is LEO-N (Local Energy Oxfordshire – Neighbourhoods) is tackling the challenge of reducing carbon emissions from major sources of energy consumption. Scottish and Southern Electricity Networks have pulled together a team to create a coordinated process to make it easier for homes, businesses, and communities to transition to using clean energy quickly, and on a large scale. Right now, there is no clear plan to help consumers make this shift, and a lack of the necessary infrastructure at the local level to support this transition.

To address this, LEO-N are collaborating with stakeholders to use an innovative approach that focuses on creating tools, business arrangements, and local government structures that will speed up the move to net zero. This involves identifying, installing, and funding a set of options, such as improved building fabric and smart technology, to reduce energy consumption. Without this coordination process the individual changes needed may not be compatible with each other, leading to increased costs and reduced effectiveness.

Another of the funded projects, Hy-Fair, will tackle challenges encountered by consumers, especially those in vulnerable situations, and small businesses requiring extra assistance in their shift towards environmentally sustainable heating solutions and other low carbon technologies.

The project, led by Southern Gas Networks, will establish the Hy-Fair Fairer Warmth Hub as a central environment equipped with specialised tools and customised guidance to empower community champions, individuals, and small businesses.

 The Fairer Warmth Hub’s Innovative features will include a streamlined system for consumers to access financial support, guidance and simplified access to resources, data analytics for precise planning, and community engagement tools. By fostering place-based approaches, Hy-Fair will encourage collaboration and help communities deliver a fair energy transition.

“Our project is more than just addressing challenges; it’s about transforming lives and communities. We’reexcited because, through the Fairer Warmth Hub, we’re not only providing vital support but also establishing an innovative framework that will be replicable nationwide. With streamlined access to resources, financial support, and community engagement tools, we’re paving the way for a fair energy transition that empowers everyone, especially those in vulnerable situations, and small businesses, to embrace sustainable heating solutions and low carbon technologies,”  said Stuart Sherlock, Innovation Governance & Performance Manager, Southern Gas Network

“The climate clock is ticking and the cost of living crisis is pushing people to their limits. SIF is on an urgent mission to support people, planet and business and these projects are a sign of hope in challenging times. Within this round 2 alpha portfolio we have some trail blazing innovators whose ideas have significant potential to save consumers money and reduce CO2 emissions, whilst also helping to turn the UK into the Silicon Valley of energy,” said Matt Hastings, Deputy Director, Ofgem Strategic Innovation Fund, Innovate UK.

The Strategic Innovation Fund is a five-year programme with up to £450m available to promote energynetwork innovation. A new round of the SIF begins each year and runs in parallel with the previous rounds. The competition for the third round of Discovery opened in September 2023.

Electricity Pylon

New energy technology plan to ‘save UK £40bn’
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A plan to give homes and businesses more control over their energy use and support innovative new technologies as part of the Industrial Strategy has been outlined by Ofgem and Business & Energy Secretary Greg Clark.

The proposal aims to transform how homes and businesses store and use energy, removing barriers to smart technology and ultimately reducing costs for end-users – something that will be discussed in depth at the Energy Management Summit in October.

The report, ‘Upgrading Our Energy System’ says over a quarter of the UK’s electricity is already being generated through renewables such as wind and solar, much of it located close to homes and businesses.

Meanwhile, new technologies that help store and manage energy are emerging and the costs are falling.

Regulator Ofgem says changes provide an opportunity to create new businesses and jobs in the UK. At the same time new technologies like smart meters, along with other improvements to manage the energy system will help the country save up to £40bn on energy costs over decades to come.

As part of the Industrial Strategy, the Government has committed to modernising the UK’s energy system and developing a business environment where new entrants to the market can compete. This, it says, will also allow industry to develop innovative new products and services, creating thousands of jobs.

The plan will also make it easier for new businesses to help customers that are interested in reducing, or increasing, their energy use at certain times, which can help balance the calls on the electricity network.

Business and Energy Secretary Greg Clark said: “Upgrading our energy system to make sure it is fit for the future is a key part of our Industrial Strategy to deliver a smarter, more flexible energy system. A smarter energy system will create new businesses and high-skilled jobs, while making sure our infrastructure is able to cope with demand.

“It’s an important part of our Industrial Strategy, given its potential to reduce energy costs, increase productivity, and put UK businesses in a leading position to export smart energy technology and services to the rest of the world.”

By rolling out smart meters, enabling suppliers to offer lower tariffs and making it easier for firms to develop smart appliances and gadgets, the plan will help consumers use energy when it is cheapest or get rewarded for returning it to the grid when it is needed.

The plan also recognises the role that energy storage can play in a smart energy grid and the opportunities presented by falling costs of battery technologies designed to store surplus energy. To allow industry to exploit these new technologies Government and Ofgem have committed to removing barriers to the introduction of this technology into our power network.

Andrew Wright, Senior Partner, Energy Systems, Ofgem, said: “The way we are generating and using energy in Britain is changing rapidly. Today’s plan sets out how Ofgem, Government and the industry will work together to modernise the energy system and make sure consumers get the benefits of the changes.

“We want to open the door to new technologies and services so that they can help to reduce bills for consumers in the long term. It is vital that we get the changes in place as there is potential for a smarter system to save consumers billions between now and 2050.”

The full implementation of the plan to move to a smarter energy system alongside other changes could help save the country up to £40bn over the coming decades, according to research conducted for BEIS by Imperial College and the Carbon Trust.