Ofgem’s Strategic Innovation Fund pushes further ahead with innovation projects to help in the drive to bring down consumer costs, decarbonise the energy system and reduce dependence on costly fossil fuel imports

Press release

Publication date

Industry sector

  • Transmission Network
  • Distribution Network
  • Ofgem’s SIF will invest around £8 million across 18 innovative projects, as part of the £450 million Strategic Innovation Fund
  • Projects focus on clean forms of heat, zero emission transport, data and digitalisation, and whole system integration
  • Following an earlier ‘Discovery’ phase, these ‘Alpha’ projects have each been allocated amounts of up to £500,000 to develop their concept in depth.

18 innovative projects worth a total of £8 million will start in August, continuing the urgent drive for innovation in Great Britain’s energy networks.

The projects have been given the go-ahead under Ofgem’s Strategic Innovation Fund (SIF) partnership with Innovate UK, which aims to help accelerate the transition over time away from costly imported gas supplies to more homegrown, decarbonised energy at the lowest cost to consumers and turn the UK into a centre of energy innovation.

The projects are led by energy network companies working with a range of partners in technology, innovation, and research. They follow on from feasibility studies carried out in spring 2022 with initial ‘Discovery’ funding from the SIF, and won further funding through a competitive process.

The projects all go deeper into developing promising new ideas for gas and electricity networks, with the potential to help transform the UK’s energy systems in line with net zero targets and benefit consumers in the coming years.

The innovations explored range from technologies for the large-scale storage of heat, to circuit breakers which will enable the increasing amounts of power from offshore wind turbines to be connected efficiently to the grid.

Several projects look at technologies which will enable the future use of hydrogen in our energy system – from compression and blending of hydrogen for use in gas networks, to testing new coatings which will protect pipework from accelerated wear and tear.

Other projects are exploring how weather data can be used to predicts risks and faults in our energy networks and testing new superconductor cables which can transmit high levels of energy more efficiently, with three to ten times the power density of existing cables.

The project teams now have six months to explore their concepts in detail, after which they can enter a further competition for large-scale funding to take their innovation towards market readiness.

The aim is to develop transformative new technologies, products and services which can be rolled out across all UK energy networks, making them fit for the future and delivering benefits for both consumers and the planet.

Neil Kenward, Ofgem Director for Strategy and Decarbonisation said:  

“Innovation in energy is a vital part of the process of bringing down the cost for energy consumers,  accelerating the  decarbonisation of our energy system and reducing our dependence on costly imported fossil fuels, over time. We have to transform the way we travel, heat our homes, and fuel our industries, and energy networks will need to innovate accordingly.

“Ofgem set up the Strategic Innovation Fund to help accelerate this transition in a way that is fair and affordable for consumers.

“I am very pleased to see these innovative ideas progress from the feasibility study stage and take the next step towards becoming a reality. They are all part of a concerted drive which will help us diversify our energy supplies in the future, protecting consumers from future energy shocks while also protecting the planet.”

Matt Hastings, Deputy Director of the Ofgem SIF programme at Innovate UK, said:

“We can’t escape the urgency of achieving net zero and the massive pressures on consumers at this hugely challenging time for us all. The SIF is an optimistic ray of hope and seeing these 18 projects lining up to address some of key barriers in the road to net zero is something we feel proud to be part of. It’s only going to get better as these round 1 Alpha projects progress, and when we launch the round 2 Discovery stage competition later this year.”

The Strategic Innovation Fund is a five-year programme with up to £450m available to promote energy network innovation. Ofgem and Innovate UK have announced further innovation challenges for round two of the SIF, working closely with all energy networks, network users and consumers, and will issue another call for feasibility study proposals in the autumn of 2022.

Annexe: list of approved projects

More information:

Funding decision documents

About the SIF

Notes to Editors

  • Ofgem – the Office of Gas and Electricity Markets - is Britain’s independent energy regulator. Its role is to protect consumers now and in the future by working to deliver a greener, fairer energy system. It does this by:
  • Working with Government, industry, and consumer groups to deliver a net zero economy at the lowest cost to consumers.
  • Stamping out sharp and bad practice, ensuring fair treatment for all consumers, especially the vulnerable.
  • Enabling competition and innovation, which drives down prices and results in new products and services for consumers.
  • Innovate UK is the UK’s innovation agency and is part of UK Research and Innovation. It drives productivity and economic growth by supporting businesses to develop and realise the potential of new ideas, including those from the UK’s world-class research base.
  • The purpose of the Strategic Innovation Fund is to support network innovation that contributes to the achievement of Net Zero, while delivering real net benefits to network companies and consumers; and to work with other public funders of innovation so that activities appropriately funded by network consumers are coordinated with activities funded by Government.
  • Ofgem is working with Innovate UK to deliver the Strategic Innovation Fund. The partnership brings together the complementary roles of both organisations. Ofgem regulates network and system operators to enable Net Zero at lowest cost to consumers. Innovate UK focuses on business growth and is delivering the SIF using its expertise in engaging with innovators on funding programmes across multiple sectors such as offshore wind, energy storage, defence, transport, aerospace, healthcare, and space.
  • Ofgem has determined that the value of the Strategic Innovation Fund will be £450m over the next network price control period (‘RIIO-2’). The level of funding available can be increased upwards if there is a need for greater funding. It will issue regular challenge competitions focused on areas of strategic importance to the future of the gas and electricity networks.
  • Under the Strategic Innovation Fund, gas and electricity network and system operators are able to form consortia with businesses and academics to propose innovative solutions to the challenges facing the networks. They can then apply for funding through the competitive process.
  • The Strategic Innovation Fund is drawn from the bills that energy consumers pay, and so all projects funded will be required to bring a net benefit to consumers.
  • Projects are funded progressively in three ‘agile’ stages – discovery, alpha and beta – to ensure focus on the right areas and minimise risk. This will help the projects to develop rapidly, react to change and maximise their potential to transform the gas and electricity networks while growing large-scale successful businesses and contributing to UK economic growth.
  • Round 1 of the SIF began with a Discovery phase competition which opened in August 2021 and closed in November 2021. The Alpha phase competition opened in May 2022 and has just concluded with this announcement. Projects will be able to apply for the Round 1 Beta stage in November 2023.

    For Round 2 of the SIF, the Discovery stage competition opens in early September 2022.
  • Projects under this competition had to be led by Gas Transmission, Gas Distribution, or Electricity Transmission Network Operators, or the Electricity System Operator, working in collaboration with other networks, businesses, and academics. Distribution Network Operators (DNOs) could partner with these organisations prior to being allowed to lead SIF projects themselves from 2023 when RIIO-ED2 (the five-year price control period for the DNOs) – starts.
  • For more information about the SIF see www.ofgem.gov.uk/sif

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Strategic Innovation Fund Round 1 Alpha Phase:

innovation projects approved for funding.

1. Energy networks with projects approved

Network Type Lead project partner No of approved projects
Electricity Transmission Scottish Hydro Electric (SHE) Transmission Plc  2
Electricity Transmission SP Energy Networks (SPT)  3
Electricity Transmission National Grid Electricity Transmission Plc (NGET) 2
Electricity system operator National Grid Electricity System Operator (NGESO) 1
Gas transmission National Grid Gas Transmission (NGGT) 4
Gas distribution  Scotland Gas Networks and Southern Gas Networks (SGN) 4
Gas distribution  Northern Gas Networks Limited (NGN)  1
Gas distribution  Cadent Gas Limited (Cadent)  1

2. Summary of projects approved 

Challenge area: Whole System Integration

Network type Project number, title and description Lead applicant Initial net funding required
Electricity transmission INCENTIVE - Innovative Control and Energy Storage for Ancillary Services in Offshore Wind Technologies for managing offshore wind generation SHE £380,606 
Electricity transmission


Connecting offshore wind to DC networks in coastal communities

SHE £423,476 
Electricity transmission

SCADENT - SuperConductor Applications for Dense Energy Transmission

Using high temperature superconductor cables to transmit energy

NGET £449,000 
Electricity system operator 


Consumer participation in energy network flexibility services

NGESO £499,919 
Gas transmission 

HyNTS Compression 

Compression of hydrogen for use in energy networks

NGGT £499,898 

Challenge area: Data and Digitalisation 

Network type Project number, title and description Lead applicant Initial net funding required
Electricity transmission


Using weather data to forecast network faults and risks

SPT £499,999 
Electricity transmission

Eye in the Sky - Utilising satellite data to improve grid resilience in emergency

Using satellite data to improve grid resilience in emergency

NGET £395,769 
Gas transmission

HyNTS Pipeline DataSet

Monitoring of hydrogen pipelines

NGGT £454,090 
Gas distribution 

Predictive Safety Interventions

Using data and AI to prevent safety incidents

SGN £411,086
Gas distribution 

Gas System of the Future

"Digital twins' to help manage gas networks

SGN  £494,925 
Gas distribution 

Intelligent Gas Grid

Using weather data and AI to monitor and control gas networks

SGN £491,075 
Gas distribution 

Thermal imagery analysis

Identifying gas losses in hydrogen networks

NGN £469,356 
Gas distribution 

Digital Platform for Leakage Analytics

Reducing gas network leaks

Cadent  £445,571

Challenge area: Heat 

Network Type Project number, title and description Lead applicant Initial net funding required
Electricity transmission


Large-scale thermal storage for heat pump flexibility 

SPT £499,116 
Gas transmission

HyNTS Protection

Protecting hydrogen pipes from wear and tear

NGGT £443,195 
Gas distribution 

Velocity Design with Hydrogen

Using hydrogen in gas distribution networks

SGN £462,320 

Challenge area: Zero Emission Transport 

Network Type Project number, title and description Lead applicant Initial net funding required
Electricity transmission

A Holistic Hydrogen Approach to Heavy Duty Transport (H2H)

Energy options for decarbonising the rail system  

SPT £401,864 
Gas transmission

HyNTS Deblending for Transport Applications

Blending hydrogen for transport refuelling stations on the network 

NGGT £313,398