IETF energy efficiency and decarbonisation studies, Spring 2021

Overview

This competition aims to support feasibility and engineering studies necessary to enable an investment decision in energy efficiency and deep decarbonisation solutions. This is the second round of the IETF Phase 1 competition.

Scope

This strand of the competition aims to:

• help industrial companies build a pipeline of future deployment projects by supporting feasibility and engineering studies
• reduce the costs and risks of either industrial energy efficiency or decarbonisation technologies

The intention is to support studies necessary to facilitate the permanent installation of technologies at industrial sites, rather than general research, development, and testing of a technology solution.

Feasibility Studies

A feasibility study aims to investigate a chosen technological solution and the technical, economic and operational impacts that this technology would have if it was to be deployed to the process in the future.

Applicants carrying out a feasibility study of technologies associated with energy efficiency should aim to demonstrate the economic case for the technology and associated emissions reductions, while ensuring that the technological barriers are identified and are manageable.

For deep decarbonisation feasibility studies, applicants should demonstrate that the technology is sufficiently well-developed and feasible to be used in the process, while increasing understanding of the economic impacts that deploying the solution will have on the process. Feasibility studies should not be carried out as part of an options analysis, as a single technology should have been already identified prior to the study.

If you are carrying out a feasibility study it must:

• investigate a defined technology solution that meets the eligibility criteria of the fund. Technologies must improve the energy efficiency, reduce the greenhouse gas emissions of an industrial process or achieve both.
• establish whether or not the potential technology is technically and commercially viable at the lead applicant’s site.
• enable the applicant to reach a conclusion on whether further development of the proposed technology solution is cost-effective, with the aim of eventually deploying the technology permanently
• In the case of energy efficiency, focus on determining the costs and benefits of the scheme, alongside how it would perform with regards to the existing process (including any potential impacts on operability, environmental benefits and scheduling of the plant).
• In the case of deep decarbonisation studies, focus on the technical barriers associated with deploying this technology and any specific barriers to deployment within this process, in addition to an assessment of the economic impacts of deploying this solution.

Engineering study

An engineering study is a detailed project plan that identifies specific technical and operational requirements, equivalent to a Front-End Engineering and Design (FEED) study. The output of an engineering study is expected to be a full project plan, incorporating all of the information required to fully understand a project and to allow the project to be at a state where a final investment decision can be made.

Your project must provide sufficient detail to arrive at an investment decision at the end of the engineering study, with key technical and project scheduling work already complete, including indication of full confidence that the project is ready to be delivered on receipt of internal approval.

It is expected that your engineering study will show appropriate consideration of:

• technical approach including performance and commissioning and acquisition of materials, expertise etc.
• carbon reduction and other benefits analysis
• health and safety, and permitting
• planning and consent
• environmental impacts
• economic analysis and forecasting
• project delivery requirements and scheduling including identified contractors
• project risks and risk management strategy

Exclusions

Through this strand of the competition, Innovate UK are not funding:

• option analysis or trade studies
• repair and maintenance projects that would be undertaken in the normal course of business
• plant closure projects
• new build plant or expansions

Energy efficiency measures cannot include:

• energy efficiency measures that are not integral to the industrial process, including:
  • building lighting
    space heating and cooling for buildings where not integral to the industrial procession or off-site transport
• electricity generation, including the installation of new renewable projects like solar panels or wind turbines
• combined Heat and Power without fuel switching

Decarbonisation measures cannot include:

• off-site work related to the wider enabling infrastructures necessary for:
• • Transportation and long term CO2 storage solutions
  • Supply of hydrogen to the site
• direct air capture technologies
• switches to fuels more carbon intensive than the gas grid, including fuels that possess equal carbon intensity to grid gas but incur additional emissions during transportation from source to industrial site where the fuel is being used. Note specific restrictions on biomass in the Technological Scope for Decarbonisation Studies guidance

Eligibility

Your project must:

• start by 01 July 2022
• end by 30 June 2024
• up to 12 months if it is a feasibility study
• up to 24 months if it is an engineering study

The end-beneficiary of the study must be a single manufacturing site or data centre in England, Wales or Northern Ireland.

This competition is aimed at businesses that use energy or produce direct emissions as a result of their industrial processes. Industrial processes here refer to a set of economic activities as defined by the Standard Industrial Classification (SIC). Businesses are allocated a SIC code at the time of registering at Companies House. You will need to check your business SIC code to make sure you are eligible.
For this competition your business must fall into the following categories of activity:

• manufacturing 10(000) through to 33(200)
• data centres 63(110)

To lead a project or work alone your organisation must also:

• be a registered business of any size in England, Wales or Northern Ireland
• be the manufacturer or data centre operator at the site that is the focus, and end-beneficiary of the study.

A site is defined as the postcode, or multiple directly adjoining postcodes at which the project takes place.

The lead applicant must be the owner of the industrial process or data centre operator. A third party (for example, a consultancy or an energy service company) can prepare an application on behalf of the lead applicant. However, BEIS will not have a legal relationship with or pay money to a third party.

To collaborate with the lead your organisation must:

• be a business of any size, a research organisation, a research and technology organisation , an academic institution or a public sector organisation. You must read the Supplementary Grant Award Guidance to find out which definition your organisation falls into.
• be registered in England, Wales or Northern Ireland
• carry out its project work in England, Wales or Northern Ireland

Funding Costs

£40 million has been allocated to fund 2 competition strands.

The total eligible project costs for a feasibility study application must be at least £30,000. The maximum grant that can be awarded for a feasibility study is £7 million.

The total eligible project costs for an engineering study application must be at least £50,000. The maximum grant that can be awarded for a feasibility study is £7 million.

The maximum grant funding amount an organisation can receive is £7 million for each project it is involved with.

For feasibility studies you could receive funding for your eligible costs of:

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

Engineering studies

The maximum grant funding amount an organisation can receive is £7 million for each project it is involved with.

For engineering studies you could receive funding for your eligible costs of:

• up to 45% if you are a micro or small organisation
• up to 35% if you are a medium-sized organisation
• up to 25% if you are a large organisation

If your engineering study project qualifies as an ‘effective collaboration’ or widely disseminates knowledge, you could receive funding for your eligible costs of:

• up to 60% if you are a micro or small organisation
• up to 50% if you are a medium-sized organisation
• up to 40% if you are a large organisation