Ofgem announces £46m of funding for eight innovation projects to improve Britain’s energy networks

Press release

Publication date

Industry sector

  • Distribution Network
  • Transmission Network
  • Eight innovation project bids successful
  • Innovation can provide low carbon and environmental benefits and cut energy costs for consumers
  • This year’s winning projects include a robotic device to inspect gas pipelines and a new approach to reducing electrical losses on the distribution system

Ofgem has confirmed funding of £46.4 million for eight projects as part of its cutting-edge innovation competitions for the network companies that deliver energy to homes and businesses.



Ofgem runs three innovation competitions to help Britain’s energy networks become smarter and more cost-efficient. The Low Carbon Networks (LCN) Fund, the Gas Network Innovation Competition (NIC) and Electricity NIC help the electricity and gas networks accelerate developing a low carbon energy sector and deliver other environmental benefits and cost savings to consumers. 



Ten projects submitted bids and now eight of these will share £46.4 million. Two of the submitted projects failed to demonstrate good value for consumers and didn’t receive funding.



Successful projects this year include:

  • Trials to see if automatically turning off transformers when they’re underused minimises electricity “losses” and lowers costs for customers.
  • Developing a robotic device to inspect the condition of hard-to-access gas pipelines - avoiding the costs of digging them up.
  • Allowing National Grid to explore new ways to keep the national electricity system balanced as more renewables connect – ensuring security of supply at lower cost for customers.
  • Converting a telecom-cable repair vessel so that it can repair offshore electricity cables and developing a new way of joining together different types of subsea cables - so repairs are quicker and cheaper.

There is a full list in Ofgem’s innovation competitions brochure. 



Maxine Frerk, senior partner for distribution, said: “Energy networks are facing significant challenges in moving to a low carbon future and ensuring costs are kept low for consumers. Ofgem’s ground-breaking innovation competitions encourage the companies to prepare for the future. The eight projects receiving funding today have successfully demonstrated that they have real potential to deliver environmental and cost saving benefits.”



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Notes to editors

1. The competitions



As part of the RIIO-T1 and RIIO-GD1 price controls, Ofgem introduced two annual Network Innovation Competitions (NICs) – one for electricity transmission companies (Electricity NIC) and one for gas network companies (Gas NIC).



This year, Ofgem is also running the final year of the LCN Fund which is part of the current electricity distribution price control arrangements (DCPR5). In April next year, the new RIIO-ED1 price control will take effect. Under the RIIO framework, the LCN Fund will not exist but electricity distribution companies will be able to apply to the Electricity NIC.



2. Decision documents



3. The projects

Competition Licensee Project Title Funding received
LCN Fund Electricity North West Fault Level Active Response £4.4m
LCN Fund UK Power Networks Kent Area System Management £3.3m
LCN Fund SSE Power Distribution Low Energy Automated Networks £2.7m
LCN Fund Western Power Distribution Network Equilibrium £11.5m
Electricity NIC National Grid Electricity Transmission Enhanced Frequency Control Capability (EFCC) £6.9m
Electricity NIC Scottish Hydro Electric Transmission Modular Approach to Substation Construction (MASC) £2.8m
Electricity NIC  TC Ormonde Offshore Cable Repair Vessel and Universal Joint (OCRV) £9m
Gas NIC National Grid Gas Transmission In Line Robotic Inspection of High Pressure Installations £5.7m



4. Background to today’s announcement



In May 2014 Ofgem shortlisted 11 projects in the Initial Screening Process (ISP) for this year’s competitions. The ten projects that passed this then progressed to the full submission stage.



Network companies submitted their fully developed proposals to Ofgem by 25 July 2014.



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.



There are more details in our press release from May 2014.



5. About the Expert Panels



The Expert Panels reviewed submissions and recommended to Ofgem which projects should receive funding. The Expert Panel members bring knowledge and expertise covering energy network industries, consumer interests, environmental policy, technical and engineering issues, and economics and finance. The panel members are:

Electricity NIC Expert Panel   Gas NIC Expert Panel LCN Fund Expert Panel
Dr Robin Bidwell (Chair) Miriam Greenwood (Chair) Dr Robin Bidwell (Chair)
Sharon Darcy Sharon Darcy Sharon Darcy
Prof. David Newbery Prof. David Newbery Prof. David Newbery
Alan Bryce Sean Sutcliffe Sean Sutcliffe
Prof. Nick Jenkins Ron Chapman Prof. Nick Jenkins

6. The Energy Network – how it works for you



Ofgem’s new animated video explains the importance of the energy network and the role it plays as its regulator.



For further press information contact:



Lisa O’Brien: 020 7901 7426

Dafydd Wyn: 020 3263 9943

Out of hours media contact number: 07766 511470