Ofgem, the UK government’s energy regulator, will offer £450 million of funding over the next five years to promote green innovations in business gas and electricity. The proposals could have a knock-on effect on business gas supplies and prices over time.
The funding offered by the regulator will be made available to network companies, businesses, researchers, and system operators in a bid to uncover bold and ambitious ideas that will accelerate Britain towards a zero-emissions energy system. The aim is to position the UK as a world leader in innovation for energy production and use for a greener world.
Ofgem said that they would increase the funding available if required. According to the energy regulator’s Chief Executive, Jonathan Brearley, such innovations are needed to reduce overall greenhouse gas emissions and strive towards Net Zero overall.
The company said that the ideas should have the potential to be scalable across networks. The focus will be on ideas that improve system integration, data and digitalisation; new technologies that will integrate flexible energy solutions like battery storage, heat and transport—for example, heat pump roll-outs—all with a view to reaching the goals noted above.
The Strategic Innovation Fund (SIF) will ensure that funding will be granted to the most promising projects and individuals that can make a valuable contribution towards reducing carbon emissions and demonstrating to private and business energy consumers the benefits of green energy.
Ofgem (the Office of Gas and Electricity Markets) has a key role in protecting energy consumers by promoting a fair and sustainable energy system.
The funding was opened to applicants on 31 August 2021 and is classed as part of Ofgem’s RII02 price controls for the operator of electricity systems.
Anyone who is granted funding under the scheme will receive the money over the next five years. Successful applicants can request additional funding if required in future, depending on their needs, plans, ideas, and potential.
Network companies, world businesses, and system operators can use the grants to turn their ideas into reality by testing them and seeing how they apply to real-world scenarios. The funding will help accelerate the transition to a greener and emission-free system and will undoubtedly play a critical part in helping the UK to reach its Net Zero ambitions by 2050.
The Parliamentary Under Secretary of State at the Department for Business, Energy and Industrial Strategy (BEIS), Lord Callanan, said that the UK is leading the charge towards decarbonisation energy systems across the world. Innovators play an important role in pushing change forward and in ensuring that consumers receive the benefits, such as cleaner and more affordable business gas and electricity.
Indro Mukerjee, Chief Executive of Innovate UK, said that the ideas brought to light by the innovative researchers and businesses in the UK have the potential to be real game-changers. These are the people who can reshape gas and electricity networks in line with our Net Zero goals whilst simultaneously generating commercial growth.
Mukerjee said that working with Ofgem is a privilege and that Innovate UK will ensure that the funding will be utilised to its utmost potential to provide maximum impact over the coming years.
UK Net Zero Business Champion, Andrew Griffith, added that UK businesses are renowned worldwide for driving change due to their entrepreneurial talent, innovation and ability to challenge the status quo. This funding is a great example of how businesses can work together to find solutions that will make energy sources cleaner and fight climate change.
Strategic Innovation Fund In Detail
The Strategic Innovation Fund (SIF) is a funding mechanism targeted towards the electricity system operators, electricity transmission, gas transmission, and gas distribution sectors.
It aims to attract ambitious projects that put a priority on finding ways to accelerate the country’s transition to Net Zero in line with the UK Government’s goals.
SIF is delivered in partnership with Innovate UK, which is a part of the UK Research and Innovation (UKRI), and the hope is that the Fund will enable the transformation of the UK into becoming the energy hub of the world. The ambition is for businesses to make the UK their first choice when it comes to growing and scaling up businesses in the energy market.
Innovate UK brings its extensive business networks and expertise in the field to its partnership with the SIF. The SIF programme will be able to tap into the best minds and businesses in the UK, as well as in the wider international network when looking for candidates for funding.
UK Research and Innovation (UKRI), the UK Government’s non-departmental public body that directs research and innovation funding, which is itself funded by BEIS, highlights that SRI funding is unique in several ways. The collaboration between Ofgem and Innovate UK recognises the strategic role that the two partners can play to drive forward innovation in the energy market. Ofgem’s aim to establish a Net Zero energy system while keeping costs to consumers down blends well with Innovate UK’s goals for business growth.
The funding is also responsive and can be flexible when customers’ needs change, creating new challenges. The energy sector needs that flexibility to respond quickly, develop new ideas and implement them when needed, and this partnership will have the ability to collaborate with other Government innovation programmes when desirable.
The programme will also prioritise a high volume of shorter, smaller projects, in contrast to the typical larger, longer duration projects funded by either Ofgem or Innovate UK in the past. These small/ short projects will then be evaluated for their potential and the long list refined to create a lower number of longer or larger projects for future funding.
There will also be a simplified application process with fewer barriers to entry, opening up the field to a wider number of applicants. And a better focus on commercialisation will ensure that innovative ideas with a great deal of potential can be scaled up commercially when needed.
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