£450m Strategic Innovation Fund to deliver greener energy networks

Ofgem Strategic Innovation Fund
© Katie Nesling

A new £450 million Ofgem Strategic Innovation Fund will deliver greener ways to heat up and power homes and businesses

The funding, which opens for applications today (31st August 2021), will be available over the next five years and will be used to keep bills as low as possible, drive the UK towards its goal of net zero greenhouse gas emissions by 2050 and help turn the UK into the ‘Silicon Valley’ of energy.

To apply for the first round of funding, companies must address the following strategic challenges:

  • Whole system integration
  • Data and digitalisation
  • Heating
  • Transport.

Projects could include:

  • Ensuring the networks are ready to roll out clean heating solutions such as heat pumps.
  • Developing ways for network companies to work together across transmission, distribution, system operation, gas and electricity.
  • Developing new technologies for networks to support flexible energy solutions, such as battery storage technology.

Energy Minister, Lord Callanan at the Department for Business, Energy and Industrial strategy, said:

“The UK is leading the world in decarbonising our energy system, with our innovators playing a vital role in going further while ensuring consumers receive clean and affordable energy.

“The Strategic Innovation Fund will ensure the best projects and most talented minds have the grants available to reduce carbon emissions and enable bill payers to see the benefits of building back greener.”

Jonathan Brearley, chief executive of Ofgem, said:

“What we need more than ever to reduce greenhouse gas emissions and reach net zero is innovation. The Strategic Innovation Fund means cutting-edge ideas and new technologies become a reality, helping us find greener ways to travel, and to heat and power Britain at low cost.

“Britain’s energy infrastructure will play a pivotal role in cutting net zero greenhouse gas emissions, and this fund will help make sure our energy system is ready to deliver that.”

Indro Mukerjee, chief executive of Innovate UK, said:

“The ideas of the UK’s world-leading innovative businesses and researchers have the potential to reshape the gas and electricity networks for net zero, while generating commercial growth.

“We are delighted to be working with Ofgem to make sure the Strategic Innovation Fund brings maximum impact over the coming years.”

UK net zero business xhampion, Andrew Griffith, said:

“UK businesses have proved time and time again that our country is home to world-leading entrepreneurial talent, innovators and disruptors.

“As we approach the COP26 Climate Change summit in Glasgow the Strategic Innovation Fund is an example of how business can provide the solutions that will make our energy cleaner and tackle climate change.”


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