Strategic Innovation Fund - Round Two Innovation Challenges


Publication date

Industry sector

  • Transmission Network
  • Distribution Network

The Strategic Innovation Fund (SIF) is a funding mechanism within the RIIO-2 network price control for the Electricity System Operator, Electricity Transmission, Gas Transmission and Gas Distribution sectors.

Electricity Distribution Operators will also be eligible to lead projects under Round 2 of the Strategic Innovation Fund as, from April 2023, the Electricity Distribution sector will start the RIIO-ED2 network price control.

Working in partnership with Innovate UK, Ofgem aims to find and fund ambitious, innovative projects with the potential to accelerate the transition to net zero. These projects should help shape the future of the gas and electricity networks and succeed commercially where possible.

To do this, we set the strategic direction (using Innovation Challenges) on what the SIF will fund. The second round of SIF Innovation Challenges will open to applications in early September 2022. Energy network licensees are invited to submit project proposals, working with third party partners, to address these challenges.

Working with stakeholders, we have identified four Innovation Challenge areas which seek to further progress whole system integration, data and digitalisation, low carbon heat, and zero emission transport.

Our four round two Innovation Challenges are:

  • Supporting a just energy transition
  • Preparing for a net zero power system
  • Improving energy system resilience and robustness
  • Accelerating decarbonisation of major energy demands

Below we provide a copy of our Innovation Challenges. Within this, we have described the process used to develop the Innovation Challenges, as well as the scope and partnership requirements for each challenge. This documentation is issued in advance of the opening of the Innovate UK portal for applications in order to provide those bidding with extra time to develop partnerships and project ideas.