Ten trailblazing projects secure investment from Ofgem’s Strategic Innovation Fund (SIF) as part of the drive to decarbonise the energy system at the lowest cost to consumers

Press release

Publication date

Industry sector

  • Distribution Network
  • Transmission Network
  • Ofgem approves approximately £95.3 million of investment for ten innovative projects, focused on clean heat and zero emission transport, data and digitalisation, and whole system integration 
  • Investment includes £49.1 million for hydrogen related projects along with major grants for other innovative gas and electricity projects   
  • The projects have gained funding following earlier feasibility study and proof of concept work. 

Ten trailblazing projects have secured £95.3 million of funding in a significant step forward in the drive for decarbonised and affordable energy. 

The ten ‘demonstrator’ projects have secured funding under Ofgem’s Strategic Innovation Fund (SIF), delivered in partnership with Innovate UK, which aims to help accelerate the transition to more homegrown, decarbonised energy at the lowest cost to consumers and turn Great Britain into a global centre for energy innovation. 

The projects are led by energy networks, working with a range of partners in research, technology, and innovation. Projects being developed include technologies that will enable more flexible use of energy, AI (artificial intelligence) and weather data systems to predict energy network risks and faults and circuit breakers that enable the increasing amounts of power generated by offshore wind to be connected to the grid more efficiently. 

Approximately £49.1 million is going to projects exploring hydrogen related technologies. These include £33.3 million of funding for National Gas Transmission led work to adapt existing gas compression units for use with hydrogen, to enable it to be fed into networks. A further £9.9 million of funding has been allocated to investigate the viability of using hydrogen to fuel heavy duty transportation. 

The chosen projects have all shown a real potential to be widely adopted, helping to transform Great Britain’s energy systems in line with Government net zero targets and benefit consumers in the coming years. To maximise consumer benefit and minimise risk, recipients of this final stage of the SIF process, have all passed through a rigorous selection process. Funding for the projects is also provided incrementally and is dependent on key milestones being met. 

Marzia Zafar, Deputy Director of Digitalization & Innovation at Ofgem, said:  

“To achieve our target of clean power by 2035 we need to look across the board for innovative solutions that will deliver resiliency, reliability and affordability at pace. 

“Our work with Innovate UK empowers innovators through SIF funding and creates a launch pad for development of the transformative technologies which will help drive forward the energy transition at least cost to consumers.” 

The CrowdFlex project, led by National Grid ESO, aims to further explore household energy flexibility as a national resource to help decarbonisation. Flexibility over when and how energy is used can help align demand to generation, improve coordination across the network and reduce stress on the system, while reducing consumer energy bills via incentives. Working with partners including Amazon Web Services, Octopus Energy and OVO Energy, the project aims to build a forecasting model of domestic demand and flexibility, based on large-scale consumer trials, with the objective of establishing flexibility as a resource and informing new product design. 

Carolina Tortora, Head of Digital Transformation & Innovation Strategy, National Grid ESO said:  

“We believe there is a huge opportunity during this transition to build a smart flexible energy system by enabling consumers to act as a new source of flexibility, supporting more low-carbon technologies and reducing consumer costs. The CrowdFlex demonstrator is a major step towards a national domestic flexibility programme.”  

The Digital Platform for Leakage Analytics project, led by Cadent with Guidehouse as technology delivery partner, aims to demonstrate a prototype for how data, analytics and innovative sensors can be used to identify, locate, and predict gas leaks in the gas distribution network. The system will enable Cadent colleagues to receive real-time alerts about critical leaks, more accurately analyse and model leakage data across the network and take quick and effective action.  

With a vital role to transport gas over hundreds of miles of pipeline, reducing leakage remains a continual focus. The DPLA project will now deliver major advancements in the industry’s ability to monitor and reduce leakage from gas networks. This will not only contribute to net zero goals by reducing leakage-related emissions but will also help to reduce costs for customers. 

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

“It is exciting to see these Beta projects, after showing their potential, moving on to demonstrate their energy innovations in the real world. Net zero is the most urgent issue of our lifetime, and the SIF and the energy networks have moved fast to develop these ideas into large-scale demonstrators in less than 18 months from initial proposals. They have the potential to deliver big savings in costs and carbon emissions in the coming years.  

“The SIF has already funded more than 100 innovative projects since 2022, and we encourage more innovators to come forward with great ideas that could become the transformative technologies of tomorrow.” 

The ten projects announced today received ‘Beta funding’, the final stage in the SIF’s first programme round which began in 2022 with ‘Discovery’ feasibility studies followed by ‘Alpha’ proof of concept projects. 

The Strategic Innovation Fund is a five-year programme with up to £450 million available to promote energy network innovation. It’s second round of projects is well underway with 53 feasibility studies just having completed their initial Discovery Phase. A third round is due to open for feasibility study proposals in the autumn of 2023. 



For media enquiries: 

Please contact the Ofgem press office press@ofgem.gov.uk or phone 020 3263 9996. 


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. Discovery projects are short feasibility studies, alpha are longer proof-of-concept projects, and beta projects are largescale demonstrators. This helps 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.  
  • To maximise consumer benefit and minimise risk funding for each phase is provided incrementally and is dependent on key milestones being met 
  • For more information about the SIF see www.ofgem.gov.uk/sif 



Strategic Innovation Fund: Round 1 Beta Phase:  

innovation projects approved for funding. 


  1. Energy networks with projects approved 
Network type  Lead project partner  No of approved projects 
Electricity Scottish Hydro Electric Transmission Plc  2
Electricity SP Energy Networks  1
Electricity National Grid Electricity System Operator   1
Gas National Gas Transmission  2
Gas Scotland Gas Networks and Southern Gas Networks  3
Gas Cadent Gas Limited  1


  1. Summary of projects approved 

Network type  

Project number, title  and description 

Initial net funding required  

Challenge area: Whole system integration  




This project looks at technologies for managing offshore wind generation. It will investigate innovative control and energy storage for ancillary services in offshore wind, coupling storage with offshore wind farms to provide grid stability services (including inertia i.e. when turbines are not generating). 


Project partners:  

Scottish Hydro Electric Transmission Plc  (lead) 

University of Strathclyde  

National Grid ESO Ltd  

The Carbon Trust





Investigating the connection of offshore wind to DC (direct current) networks in coastal communities. The project will look at the use of DC breakers to allow many wind farms to connect to a DC network, and thereby reduce the number of coastal converter stations, achieving both economic and environmental benefits.  


Project partners: 

Scottish Hydro Electric Transmission Plc (Lead) 

University of Edinburgh  

Carbon Trust Advisory Ltd  

National Grid ESO Ltd  

SuperGrid Institute  





This project will investigate large scale consumer participation in energy network flexibility services. 


Project partners: 

National Grid ESO Ltd (lead) 

Element Energy Ltd  

National Grid Electricity Distribution Plc  

Octopus Energy Ltd  

OVO Energy Ltd  

Southern Electric Power Distribution Plc  

Centre for Net Zero Ltd  

OHME Operations UK Ltd  

Amazon Web Services



HyNTS Compression  

Compression of hydrogen for use in energy networks. This project will test repurposing of existing compression equipment to determine if it could be used for 100% hydrogen transmission.  


Project partners:  

National Gas Transmission (Lead) 

Cardiff University  

Siemens Industrial Turbomachinery Ltd  

Northern Gas Networks Ltd  

Southern Gas Networks Plc  

DNV Services UK Ltd

Premtech Ltd  

Cullum Detuners Ltd


Challenge area: data and digitalisation     


This project will investigate using data from historical faults, land cover (the physical material on the surface of the earth), weather and surveys to improve the forecasting of network faults and risks. 


Project partners:  

SP Transmission Plc (lead) 

University of Glasgow  

SP Distribution Plc  

SIA Partners UK Plc  

Scottish Hydro Electric Power Distribution Plc



Predictive Safety Interventions 

Using data and AI to prevent safety incidents 


Project partners:  

Southern Gas Networks Plc (lead) 

Cadent Gas Ltd  

Northern Gas Networks Ltd  

National Grid Gas Plc  



Intelligent Gas Grid 

This project will investigate the use of weather data and artificial intelligence (AI) to monitor and control gas networks in including the optimisation of pressure management, detection of faults and assisting the injection of green gas into the network. 


Project partners:  

Southern Gas Networks Plc (Lead) 

Cadent Gas Ltd  

Northern Gas Networks Ltd  

Wales & West Utilities Ltd  

National Grid Gas Plc  

Utonomy Ltd  

DNV Services UK Ltd  


Digital Platform for Leakage Analytics 

This project will investigate  reducing gas network leaks through the development and use of a digital platform.   


Project partners:  

Cadent Gas Ltd (lead) 

Northern Gas Networks Ltd  

Wales & West Utilities Ltd  

National Gas Transmission Plc  

Southern Gas Networks Plc  

Guidehouse Europe Ltd  

Challenge area: heat      

Velocity Design with Hydrogen 

This project will investigate the use of hydrogen in gas distribution networks. 


Project partners:  

Southern Gas Networks Plc (lead) 

Cadent Gas Ltd  

Northern Gas Networks Ltd  

Wales & West Utilities Ltd  

National Grid Gas Plc  

Institution of Gas Engineers and Managers  

DNV Services UK Ltd  

Challenge area: zero emission transport      

HyNTS Deblending for Transport Applications 

This project will investigate the blending of hydrogen for heavy transport refuelling stations into the gas network.   


Project partners:  

National Grid Gas Plc (lead) 

Element Energy Ltd  

Cadent Gas Ltd  

Northern Gas Networks Ltd  

Wales & West Utilities Ltd  

Southern Gas Networks Plc  

DNV Services UK Ltd

Element 2 Ltd  

HyET Hydrogen B.V.