Green hydrogen connections and net-zero terraces: Ofgem allocates fresh innovation funding

Image: Electricity North West

Ofgem has this week announced which projects will take a share of funding from the next phase of its £450m Strategic Innovation Fund (SIF).

A total of £16.09m has been allocated under this latest funding round, which is intended to support projects to build on initial feasibility studies with in-depth preparations to launch their concept. Ofgem hopes that successful projects could implement their innovations in energy networks from the mid-2020s.

The Deputy Director of the SIF at Innovate UK, Matt Hastings, called the selected projects “trailblazers” and “a sign of hope in challenging times”.

Ensuring affordability, accessibility and justice as the UK transitions its energy system to net-zero is a key focus for several of the successful 36 projects.

For example, the Net-Zero Terrace scheme led by Electricity North West is exploring how an entire terraced street could decarbonise its energy use, mitigating the need for each household to invest in separate tariffs and heat pumps.

UK Power Neworks has also taken funding for two projects intended to make low-carbon heating options more affordable, with a focus on social housing tenants and other vulnerable customers.

Prime Minister Rishi Sunak recently increased the level of funding that each home can claim through the Boiler Upgrade Scheme to £7,500, from £5,000. This decision was taken in light of the high upfront cost of heat pumps, which has been found to be a deterrent for those keen to fit this technology in their homes.

There are also several hydrogen-related projects to have secured SIF funding this time around.

National Grid Transmission (NGT) is being supported to develop a hybrid storage system for hydrogen, which could enable safer and more affordable storage at sites where the gas will be used.

And UK Power Networks has secured funding for its ‘Connectrolyser’ research, exploring innovative new forms of electricity connections that could be suitable for powering the electrolysers used to produce green hydrogen. The UK is notably targeting 10GW of low-carbon hydrogen generation capacity by 2030, at least half of which should be green.

Planning and forecasting

Upgrading the UK’s energy system in a way that addresses the trilemma of energy security, costs and the low-carbon transition is a major effort that will require robust planning and sound decision-making.

It is, therefore, not surprising that the SIF is supporting numerous projects developing planning and forecasting solutions.

Digital planning tools could also help improve grid resilience as physical climate risks intensify. The National Grid’s ‘Scenarios for Extreme Events’ workstream exists to create a strategic planning methodology for emergencies that would have “severe repercussions on energy networks”.

Similarly, UK Power Networks is developing a climate resilience demonstrator tool while Scottish and Southern Electricity Networks is working to make meteorological data available and useable by energy networks. This will improve their ability to model and predict the impacts of changing weather patterns linked to climate change.

SIF launched in 2021 and will run through to 2026. It is expected to invest at least £450m. This level of funding may be uplifted in the future if it is deemed necessary.

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