Ofgem Strategic Innovation Fund Round 4 Discovery - September 2024

To lead a Discovery Phase Project you must be an Ofgem licensed electricity or gas distribution network, transmission operator, or Electricity System Operator (ESO).

You are encouraged to have other Project Partners in addition to the mandatory requirements listed above. Your 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.

Some of the Round 4 Challenges have specific project partner requirements in addition to the lead network licensee.

Challenge 1: Faster network development: for Theme 2, you must partner with organisations with proven experience in developing and trialling regional energy models.

Challenge 3: Embedding resilience partner requirements: for theme 1, you must involve a consumer representative group relevant to rural energy development.

For other challenges/themes, there are no specific partner requirements.

Ofgem are looking for proposals that involve all the necessary stakeholders relevant to the proposed innovation. We particularly encourage Projects working with suitable SME technology developers and growth companies.

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 January 2025
• end by 31 May 2025
• be completed within the five month window

Matched contributions that exceed the 10% mandatory minimum contribution will be assessed as delivering greater value for money. Projects must also consider the suitability of sourcing additional private or public funding where it may be unsuitable for consumer bill payers to finance assets or other equipment and resources.

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.

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

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
• 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.

At the end of Discovery Phase all milestones detailed in the Project Direction must be fulfilled. The successful organisation will be invited to submit an application into the Alpha phase and a further assessment will take place.

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.

Click here to watch the recorded briefing event.

Click here to download the briefing slides.

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.