Ofgem Strategic Innovation Fund Round 5 Discovery C7

Overview

The Ofgem Strategic Innovation Fund (SIF) Round 5 Discovery competition provides up to £30 million across seven challenge areas to support innovation within Great Britain’s energy networks.

Delivered by Innovate UK in partnership with Ofgem, the fund aims to support projects that can contribute to net zero at the lowest cost to consumers while creating opportunities for innovative businesses to grow and scale.

Discovery is the first of four phases, followed by Alpha, Beta and Deployment. Projects should establish the problem, understand the needs of consumers and network users, identify constraints and build the foundations for solutions that can progress towards testing, demonstration and eventual deployment.

This competition is split into seven challenges:

• Challenge 1: Advanced energy transmission and networks
• Challenge 2: Dynamic modelling
• Challenge 3: High energy demand point integration
• Challenge 4: Consumer centric grid expansion
• Challenge 5: Enhanced system visibility and control
• Challenge 6: Green gas
• Challenge 7: Whole system optimisation (this strand)

Scope

This competition is delivered by Innovate UK in partnership with the Office of Gas and Electricity Markets (Ofgem). It is funded by the Ofgem Strategic Innovation Fund, which aims to deliver net zero at lowest cost to consumers and support innovative businesses to grow and scale.

Each Round 5 Innovation Challenge has different aims. Projects must select the challenge they are working on.

Projects must meet the eligibility criteria of the Strategic Innovation Fund, as stipulated in the SIF Governance Document.

Projects must demonstrate that they deliver a net benefit to consumers through:

• financial cost reductions, for example in operating the network, energy bills or for users of network services
• emission reduction
• access to revenues for network users
• introducing new products, processes and services to the UK energy market

Proposals must focus on network innovation that can benefit GB energy network infrastructure, consumers, operation and utilisation.

Projects must address:

• users and their context
• constraints affecting the problem or wider context
• opportunities for improvement
• environmental impacts

The Discovery Phase will define the problem and the value in solving it. It will also facilitate a common understanding of consumers’ and network users’ needs from the innovation and identify constraints.

The Alpha Phase will focus on preparing and testing solutions identified during Discovery, ahead of any large-scale demonstration in the Beta Phase. The Deployment Phase must have a proven solution to be deployed into business as usual.

Key themes and topics

Theme 1: Whole system modelling and scenario analysis

Theme 2: Development and demonstration of high impact multivector configurations

Projects must also consider contributing to the following cross-cutting areas:

Customer focussed: the SIF is funded through customer bills, so all projects must ensure solutions are inclusive and accessible to diverse customer and consumer segments through relevant third-party partnerships, stakeholder engagement and user-centric design principles, with the aim of saving customers money.

Scalability and replicability: developing solutions that can be deployed across multiple regions and scaled to meet future grid needs.

Data and digitalisation: harnessing digitalisation and implementing Energy Data Best Practice across all areas.

Shared learning: not all innovation projects will lead to deployment, so learning and how it is shared openly across the energy sector and wider is critical.

Skills and capability: projects should consider where upskilling and new capability development are needed and signal those needs to relevant third parties such as academics, training institutes and key supply chain partners.

Supply chains: projects should assess the deliverability and scalability of solutions across the GB network from a supply chain perspective, including the maturity of supply chains and potential vulnerabilities such as labour requirements, logistical challenges and environmental risks.

Resilience: strengthening the adaptability and security of energy networks to withstand extreme weather events, cyber threats and fluctuations in energy demand.

Ofgem will not fund projects that do not meet the requirements of the SIF Governance Document.

Project duration

1 to 5 months

Must start after 1 January 2027

End by 31 May 2027

Projects must be completed within the five-month Discovery Phase window and must always start on the first day of the month.

Award value

Projects must have total eligible Strategic Innovation Fund (SIF) requested funding of no more than £200,000, exclusive of VAT

Funding rates

Projects must provide a minimum of 10% of total project costs from private funds.

Matched contributions exceeding the mandatory 10% minimum will be assessed as delivering greater value for money.

Eligibility criteria

• Projects must be collaborative and led by an Ofgem licensed gas distribution network, gas transmission network, electricity transmission network, electricity distribution network or the National Energy System Operator (NESO)
• Projects must include at least one grant claiming project partner
• Collaborators can include start-ups; SMEs; suppliers; academics; independent researchers; disruptors; other licensed energy network companies; and other relevant organisations
• All funded project work must meet the requirements of the Strategic Innovation Fund
• Projects must deliver a net benefit to GB energy network consumers
• This grant is provided on a no subsidy basis under the Subsidy Control Act 2022. In limited circumstances, EU State aid rules may apply under the Windsor Framework