Ofgem Round 3: Call for Ideas

Overview

This Call for Ideas forms part of a programme delivered with the Office of Gas and Electricity Markets (Ofgem) in partnership with Innovate UK. This alignment enhances the programme’s ability to contribute to Government’s net zero objectives, while allowing it to remain dynamic, flexible and joined up with Government, industry and consumers.

Ideas which advance through this process and develop into a project proposal led by an Energy Network, may be offered the opportunity to seek funding from the Ofgem Strategic Innovation Fund (SIF). The fund aims to deliver net zero at the lowest cost to consumers and support innovative businesses to grow and scale.

Scope

The Strategic Innovation Fund (SIF) aims to deliver net zero at lowest cost to consumers and support innovative businesses to grow and scale.

This includes decarbonising gas and electric energy distribution, transmission networks and benefit to the consumer. SIF projects should help shape the future of the gas and electricity networks and succeed commercially where possible.

SIF funded projects must aim to reduce costs for consumers and carbon emissions, while improving access to revenues and markets. This will also incentivise the creation of new products, processes and services, linking into the themes for each challenge.

The Challenges for SIF Round 3 are:

Challenge 1: Whole system network planning and utilisation to facilitate faster and cheaper network transformation, and asset rollout
Challenge 2: Novel technical and market approaches to deliver an equitable and secure net zero power system
Challenge 3: Unlocking energy system flexibility to accelerate electrification of heat
Challenge 4: Enabling Power-to-gas (P2G) to provide system flexibility and energy network optimisation

Within each challenge there are specific themes. Your proposal must meet one of these themes for your selected challenge.

Challenge 1 themes:

Digital simulation and advanced modelling techniques to facilitate whole system network planning and development
Leveraging data, digital tools, and novel commercial arrangements to maximise existing network capacity
Reducing network connection times through use of demand and supply side flexibility
Supporting consumers to make cost effective decarbonisation choices co-ordinated with wider local area or regional plans

Challenge 2 themes:

Novel market and technical approaches to cost effectively minimise renewable energy curtailment
Leveraging disruptive computing technologies for improving system visibility, performance, and cyber-security.
Effectively managing peak demand and stability through increased flexibility including over longer time periods (multi-day and seasonal).
Enabling disadvantaged consumer segments to participate in flexibility markets and benefit from novel low carbon technologies, to make more cost-effective choices for low carbon technologies

Challenge 3 themes:

Improving local heat supply and demand analysis and coordination to support energy network planning
Improving the value and capture of system benefits from heat flexibility
Effectively managing peak demand and stability through increased flexibility including over longer periods (multi-day and seasonal)
Equitable approaches to reinforcement costs driven by heat electrification including via improving visibility of constraints

Challenge 4 themes:

Optimising electrolyser deployment and operation to unlock whole system value
Commercial and technical innovation to secure system benefits from hydrogen storage deployments

This Call for Ideas is open to proposals for any social, regulatory, market, legal or technical innovation that aligns with the challenges and related themes identified and is within the remit of the Energy Networks. Proposals can be related to a product, process or service.

Portfolio approach

The Energy Networks will decide which proposals they want to take forward. They may want to explore a variety of projects across different technologies, markets, technological maturities and research categories, which will inform future partnerships.

Eligibility

Your submitted proposal must:

intend to carry out its project work in Great Britain (England, Scotland or Wales)
intend to exploit the results from or in Great Britain
outline network customer benefits
include a unique selling proposition
detail the types of Networks you wish to be involved with
highlight which challenge and theme your idea addresses

The future funded opportunities for SIF Round 3 have different phases:

Discovery Phase: projects must last up to three months and have a total requested funding of no more than £150,000, exclusive of VAT
Alpha Phase: projects must last up to six months and have a total requested funding of no more than £500,000, exclusive of VAT
Beta Phase: projects must last up to five years and have a total requested funding of no more than £10 million, exclusive of VAT, total costs and funding requests of more than this may be considered on a case by case basis

A minimum of 10% compulsory contribution is also expected at each stage.

Due to current Government trade restrictions, any commercial, business development or supply chain activity with any Russian or Belarusian entity as partner or subcontractor must be scrutinised in detail by Ofgem ahead of their funding decisions. This includes any goods or services originating from a Russian or Belarusian source.

Any applications that are viewed as involving Russian or Belarusian entities, goods or services, which includes parent companies, may be at risk of funding approval and additional delays. Where potential concerns are identified the lead energy network applicants will need to work with the relevant Government bodies to ensure the ongoing protection of critical national infrastructure.

Submitted proposals for this Call for ideas, will be sent for consideration at 11am UK time on the following dates:

27 June 2023 – First submission
26 July 2023 – Second submission
21 August 2023 – Final submission date

Proposals submitted after 11am on the first two dates will be sent for consideration on the final date.

This Call for Ideas is open to sole innovators and to organisations of all types and sizes. This includes UK registered businesses of any size, research organisations, and research and technology organisations.

To secure future funding from SIF, you will be required to partner with an Energy Network who will lead an application into one of the SIF challenge competitions.

You can submit proposals which have been submitted into previous rounds of the SIF funding opportunities where you can show it meets the challenges for Round 3.

To avoid duplication, you must not submit proposals which have already been shared directly with the Energy Networks, through the Energy Network Association’s (ENA) Smarter Networks portal.

Exclusions

This programme will not fund projects that do not meet the Eligibility Criteria outlined in the SIF Governance document.

Funding Costs

A total of up to £450 million exclusive of VAT is allocated to the Strategic Innovation Fund (SIF) until 2026.

This opportunity is a Call for Ideas and does not guarantee a proposal will be taken forward. There is no funding available for this Call for Ideas.

The total funding available for the funded phases of the SIF competitions can change. Ofgem has the right to:

adjust the provisional funding allocations between the phases
apply a ‘portfolio’ approach based on technology, geography, innovation, markets, and participants

The Energy Networks reserve the right to make the final decisions as to which proposals are taken forward to apply for funding in the SIF competitions.

For the funded phases of the SIF competitions, Ofgem reserve the right to make the final decision as to which projects are funded.

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