Ofgem announces £62.8 million to deliver smarter energy network for consumers

Publication date
30th November 2015
Information types
Policy areas
  • 9 project bids successful under Ofgem’s network innovation competition
  • Successful projects include looking at new types and uses of gas and smarter ways to run the electricity network

Ofgem has announced funding of £62.8 million for nine innovation projects as part of its revolutionary innovation competition to deliver smarter energy network for consumers. The funding is provided under Ofgem’s Network Innovation Competition (NIC), which encourages energy network companies to enhance innovation to reduce costs for consumer while helping deliver a low carbon future. When combined with additional contributions from the companies and external funding this will see over £100 million being invested in innovation.

In total, there was £99 million of NIC funding available for the eleven projects which had applied for funding under the schemes. However, Ofgem could not be confident that all projects clearly demonstrated good value to customers at this stage, resulting in two missing out on funding this year. 

Successful projects this year include:

  • Developing a commercially viable facility that can process waste, convert it to gas and distribute it through the existing gas network to consumers.
  • Delivering solutions to manage excessive temperatures at distribution substations, allowing better use to be made of existing assets and reducing long-term costs for consumers.
  • Testing new designs of pylons that are smaller, better for the environment and can be used in rural and difficult to access areas.
  • Working with Leeds City Council to test arrangements to power some of their refuse collection vehicles using gas from the network.

Maxine Frerk, senior partner for distribution, said: “Ofgem’s innovation competitions encourage the companies to deliver a smarter network for consumers. Investments in networks have a real potential to connect more renewable generators, and enhance security of supply in a more cost efficient way. The nine projects receiving funding today show how new sources and uses of gas together with smarter grids can benefit consumers by making the energy system more secure and cost effective. As with all the projects we have funded we expect to see learning from these projects being shared across industry and are pleased to see many of the earlier projects now being rolled out across companies and delivering real benefits for consumers.”

Notes to editors

  1. As part of RIIO-ED1, RIIO-T1 and RIIO-GD1 price controls, Ofgem introduced two annual Network Innovation Competitions (NICs) – one for electricity network companies (Electricity NIC) and one for gas network companies (Gas NIC).
  2. Gas NIC decision document and Electricity NIC decision document.  One project has been offered partial funding. The company may choose not to progress this project on these terms. We are working with them and a decision is expected in early 2016.
  3. The total funding potentially available across the two competitions was £99m. Of this, £81.9m has been requested by the bidding companies. Our decisions will allocate £62.8m. £38.7m of other funding and in kind contributions would be invested by the licensees and collaborators.
  4. In April 2015 Ofgem received 13 projects in the Initial Screening Process (ISP) for this year’s competitions. Eleven projects progressed to the full submission stage. Network companies submitted their fully developed proposals to Ofgem on 31 July 2015.
  5. Expert panels evaluated the submissions against criteria and made a recommendation to Ofgem on which projects should receive funding. Ofgem made the final decision and accepted the panel’s recommendations.

About the Expert Panel

The Expert Panels reviewed submissions and recommended to Ofgem which projects should receive funding. Their members bring knowledge and expertise covering energy network industries, consumer interests, environmental policy, technical and engineering issues, and economics and finance. Profiles of the electricity expert panel and gas expert panel can be found on the Ofgem website.

The panel members are:

ElectrciTy NIC Expert Panel Gas NIC Expert Panel
Dr. Robin Bidwell (Chair) Miriam Greenwood OBE (Chair)
Alan Bryce Ron Chapman
Professor Nick Jenkins Sean Sutcliffe
Jo Armstrong Professor David Newbery
Sharon Darcy Trisha McAuley OBE

For further press information contact:

Dafydd Wyn: 020 3263 9943 
Chris Lock: 020 7901 7225
Out of hours media contact number: 07766 511470