Detailed designs of smart, local energy systems

Key Features

UK organisations can apply for a share of up to £30 million to develop clean, cheap local energy systems that create prosperous, resilient UK communities. This funding is from the ISCF’s Prospering from the Energy Revolution challenge.

Programme:     Innovate UK

Award:     Share of up to £30 million

Opens: 7th May 2019

Closes: 7th Aug 2019

! This scheme is now closed


UK Research and Innovation (UKRI) will invest up to £30 million in revolutionary designs for local energy systems. Designs must deliver cleaner, cheaper energy services and create more prosperous and resilient communities across the UK.

This competition is part of a wider Industrial Strategy Challenge Fund (ISCF) programme called Prospering from the Energy Revolution (PFER).


Your proposal must be focused on a specific, named, UK location. The locality must be at least the size of a town but our ambition is to fund ground breaking local energy systems projects up to city or region scale (or equivalent industrial, rural or other area in terms of energy capacity).

Your consortium must demonstrate the ambition, expertise and ability needed to drive fundamental change in the energy system of the locality. You must be able to replicate this change in another locality in the coming decade. It must incorporate a wide range of consumer types and demonstrate a significant change in scale and impact against comparable projects internationally.

Your project must:

  • develop revolutionary market and business model approaches for the provision of smart energy systems
  • develop a detailed understanding of energy supply, distribution and consumption patterns in your locality
  • understand the current and future energy assets, networks and consumer needs in your locality
  • integrate new energy technologies across heat, power and transport in a way that is replicable and scalable to multiple areas across the UK
  • reduce the whole system costs of energy provision, resulting in significantly smaller bills for the end consumer
  • validate the revenue streams and value proposition of the proposed business model
  • write sound financing and investment proposals for the implementation of the energy system design which share the benefits and risks fairly between investors, consumers, utilities and authorities
  • show an integrated approach to managing energy supply, distribution and consumption across heat, power and transport
  • consider the future role of gas as well as electricity systems
  • describe how you will aim for an open data and systems design policy wherever possible
  • include a finance and investment work package (covering, as a minimum, the relevant points raised in questions 1 and 5 of the application)
  • show you understand the impact that varied boundaries of local authorities, gas and electricity distribution networks, and mobile energy assets (such as vehicles) have on the national and local energy system
  • consider the policy and regulatory conditions needed to design the local energy system
  • consider how you will work with local authorities, the Department for Business, Energy and Industrial Strategy (BEIS), OfGem and Code Administrators to implement your design

Your detailed design proposal should demonstrate:

  • use of techniques and expertise from neighbouring industries, such as digital and technology, finance, entertainment or transport
  • collaboration with other Prospering from the Energy Revolution projects to develop common standards and insights

Your design should be ready for implementation in the 2020s. On completion of the 24 month project you must provide compelling, quantified evidence that your design can:

  • deliver bill reductions of at least 25% for the end consumer
  • unlock substantial private investment to build and replicate the approach in the 2020s and beyond, showing that your business model proposition can attract up to 10 times more investment in energy systems technologies (compared to business as usual) once implemented
  • create high value local jobs and UK supply chain growth
  • reduce energy emissions (tonnes of carbon dioxide equivalent, tCO2e) for the locality to below Carbon Budget 5 levels, and present a feasible route towards net-zero emissions
  • improve efficiency and productivity of the local energy system
  • improve energy security and resilience, both short and long term
  • build world-leading expertise in smart energy, and develop components (products, services and skills) with high export potential


To lead a project you must be a:

  • UK based business
  • RTO
  • public sector organisation
  • university
  • higher education institution
  • Catapult
  • or a local authority or similar body

The lead organisation must claim grant through this competition. At least 2 other organisations in the consortium must also claim grant.

If an RTO or public sector organisation is the lead they must collaborate with at least 2 businesses, including at least one micro, small or medium-sized enterprise (SME). You must explain in your application why it is not appropriate for the project to be business-led.

All projects must be collaborative.

To collaborate with the lead applicant you must be a UK based:

  • business
  • academic institution
  • charity
  • public sector organisation
  • or research and technology organisation (RTO)

Collaborations are expected to include:

  • at least one SME
  • at least one RTO or public sector organisation
  • representatives from the energy, information and communication technologies sectors

Innovate UK are not looking to fund the established consortia that were successful in securing funding from the Smart Local Energy Systems Demonstrators competition. However, they want individual companies who are receiving funding through the demonstrator competition to be eligible for funding, as they may bring valuable skills to another consortium.

Funding Costs

Innovate UK have allocated up to £30 million to fund innovation projects in this competition and you can claim up to £3 million in grant funding.

They will consider proposals wishing to claim in excess of £3 million and up to £5 million in grant funding. This is if the project is of exceptional scale and ambition and you can demonstrate that extra funding will drive substantially higher leverage and value for money.

Projects must start on 1 January 2020 and end by 31 December 2021. All projects should last no longer than 24 months.

You could get funding for your eligible project costs of:

  • up to 70% if you are a micro or small business
  • up to 60% if you are a medium-sized business
  • up to 50% if you are a large business

The research organisations in your consortium can share up to 30% of the total eligible project costs. If your consortium contains more than one research organisation, this maximum will be shared between them.


They will not fund projects that do not meet the aims of the competition, for example proposals that:

  • do not include details of smart local energy system design, project scale, location, technical configuration, innovations adopted or details of project management
  • do not develop a compelling business model-led approach that can attract sustainable investment in the 2020s
  • do not identify significant economic, environmental and societal benefits at local and national scales, including improving user experience
  • do not consider heat, transport and power
  • focus on component product development or manufacturing support, unless clearly linked to innovative whole energy system business or regulatory models for deployment
  • involve niche configurations, unlikely to be replicable or scalable across the UK in the 2020s
  • are incompatible with Carbon Budget 5 or air quality targets
  • are unlikely to make a material impact on the growth of the UK smart energy systems sector or drive inward investment and export opportunities for UK businesses