Ofgem Strategic Innovation Fund Round 4 Discovery - January 2025

Discovery Phase Projects must be led by an Ofgem licensed electricity or gas distribution network, transmission operator, or Electricity System Operator (ESO).

They are encouraged to have other Project Partners in addition to the mandatory requirements listed above. The Project Partners can include a variety of third-party innovators such as:

• start-ups
• SMEs
• suppliers
• academics
• independent researchers
• disruptors
• other licenced energy network companies

If you are one of the above potential project partners and would like to find an energy network to partner with, please see more details of the programme here and contact the Ofgem SIF team here. Ofgem are looking for proposals that involve all the necessary stakeholders relevant to the proposed innovation, and particularly encourage Projects working with suitable SME technology developers and growth companies.

Some specific themes have additional partner requirements: these are detailed in the “Specific Themes” section below.

Your Project must:

• have total eligible Strategic Innovation Fund (SIF) requested funding of no more than £150,000, exclusive of VAT
• provide a minimum of 10% of total Project costs as a compulsory contribution from alternative funds
• start after 1 May 2025
• end by 30 September 2025
• be completed within the five month window

Your Project deliverables must be completed within the five month window stated. You are required to fulfil all monitoring requirements, for example, end of phase meetings and Project show and tells; further guidance will be provided.

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

Each Round 4 Innovation challenge as listed in the Strategic Innovation Fund – Round 4 Innovation Challenge document has different aims.

You must select which challenge your Project is working on.

Challenge 1: Faster Network Deployment represents a greater focus from:

• Whole System Integration
• Preparing for a Net Zero Power System
• Whole System Network Planning

Challenge 2: Greater heat flexibility represents a greater focus from:

• Whole System Integration, Heat
• Accelerating Decarbonisation of major demands
• Unlocking Energy system flexibility to accelerate electrification of heat

Challenge 3: Embedding resilience represents a greater focus from:

• All Challenges from Round 1
• Three of the four challenges from Round 2 (excluding Preparing for a net zero power system)
• Power to Gas for system flexibility

Challenge 4: Accelerating towards net zero energy networks represents a greater focus from:

• Accelerating Decarbonisation of major demands

Your Project must meet the eligibility criteria of the Strategic Innovation Fund (SIF), as stipulated in the SIF Governance Document.

Applicants must demonstrate that the Projects deliver a net benefit to consumers through:

• financial cost reductions, for example, operating the network, energy bills, users of network services
• emission reduction
• access to revenues for network users
• introducing new products, process and services to the UK energy market

Your proposal must focus on network innovation that can benefit GB energy network infrastructure, consumers, operation, and utilisation.

You must address:

• users and their context
• constraints affecting the problem or wider context
• opportunities for improvement
• environmental impacts

You must select the primary Strategic Innovation Fund (SIF) Innovation Challenge focus theme that your project is targeting.

Challenge 1: Faster Network Deployment:

• Theme 1: novel methods to increase electrical capacity from existing assets or support faster and more efficient connection methods including using digital innovations
• Theme 2: regional balancing approaches to accelerate low carbon technology deployment (partner requirement: you must partner with organisations with proven experience in developing and trialling regional energy models)

Challenge 2: Greater heat flexibility:

• Theme 1: flexibility solutions to reduce peak electricity demand from heat decarbonisation

Challenge 3: Embedding resilience:

• Theme 1: cross vector approaches to decarbonise rural communities in a resilient manner (partner requirement: must involve a consumer representative group relevant to rural energy development)
• Theme 2: transition planning for an energy system with reducing natural gas demand

Challenge 4: Accelerating towards net zero energy networks:

• Theme 1: innovation to improve efficiency of network operations

Any proposed project against the points above must also consider contributing to four key cross-cutting areas:

• inclusive development: ensuring the solution is applicable and accessible to diverse customer and consumer segments through relevant stakeholder engagement and user centric design principles
• skills and capability: consider throughout the project where upskilling and new capability development is needed and signalling those needs to relevant third parties like academics, training institutes and key supply chain partners
• supply chains: assess the deliverability and scalability of the solution across the GB network from a supply chain perspective including maturity of supply chains, potential vulnerabilities such as labour requirements, logistical and environmental risks
• data and digitalisation: harness digitalisation and implementing Energy Data Best Practice across all areas

At this stage a Project Direction will be issued for the Discovery Phase only. Successful applicants will be invited to apply for Alpha Phase.

The Discovery Phase of a Project will define the problem and the value in solving it. It will also facilitate a common understanding of consumers’ and network users’ needs from the innovation and identifying constraints.

The Alpha Phase will focus on preparing and testing solutions that are identified during the Discovery Phase, ahead of any large-scale demonstration of the Project in the Beta Phase.

Discovery phase will have many projects, feasibility studies lasting 2-3 months, up to £150k. Alpha will have fewer projects, proof of concept, lasting up to 6 months, up to £500k per project. Beta will have a few projects, large scale, real world demonstrator developments lasting up to 5 years, multi million pound funding. Further information can be found at the Ofgem SIF programme page.

A briefing event was recorded on 27 January: the recording will be available soon. Slides from the briefing can be downloaded here.

If you would like help to find a project partner, including if you have an idea and would like to find an Ofgem licensee to work with, see more details of the programme here and contact the Ofgem SIF team here.