Groundbreaking Initiatives Receive Financing from Ofgem's Strategic Innovation Fund (SIF) in Pursuit of a Decarbonized Energy System at Minimal Cost to Consumers - £49.1 Million Allocated for Hydrogen-Related Projects

Groundbreaking Initiatives Receive Financing from Ofgem's Strategic Innovation Fund (SIF) in Pursuit of a Decarbonized Energy System at Minimal Cost to Consumers - £49.1 Million Allocated for Hydrogen-Related Projects

In a significant stride towards decarbonising the energy system, the Office of Gas and Electricity Markets (Ofgem) has announced the funding of ten groundbreaking projects through its Strategic Innovation Fund (SIF). These projects, which have received 'Beta funding', mark the final stage in the SIF's first programme round that commenced in 2022 with 'Discovery' feasibility studies followed by 'Alpha' proof of concept projects.

The projects encompass a wide range of technologies, including those for flexible energy use, AI and weather data systems, circuit breakers for offshore wind power, and more. Notably, several projects focus on hydrogen-related technologies and broader energy system innovations supporting net zero targets.

Hydrogen-related Projects

1. Hydrogen Production and Storage Projects The UK Government and Ofgem’s funding mechanisms, including SIF, support projects that scale up hydrogen production and develop regional hydrogen transport and storage networks. These projects aim to unlock hydrogen’s role in clean power generation and large-scale storage to maximise renewable energy use, supporting a decarbonised power system and hard-to-electrify sectors.
2. Intelligent Gas Grid Programme (SGN-led) Backed by Ofgem’s SIF, this £6 million program employs AI, digital technologies, and predictive systems to build a smarter, cleaner gas grid that integrates renewable gases like biomethane and reduces methane leakage, a potent greenhouse gas.
3. CrowdFlex (NESO-led) Funded by SIF with around £20 million, CrowdFlex explores the role of domestic flexibility in managing the electricity grid. This project develops real-life data-driven models enabling consumers to support grid stability and reduce energy costs while integrating renewable and low carbon energy sources.
4. Heatropolis (UKPN-led) A £10 million SIF project researching novel commercial frameworks combining distribution network planning and heat network design. This supports integration of low-carbon heat solutions linked to hydrogen heating and storage opportunities.
5. Advanced Energy Storage and Hydrogen-based Storage Systems SIF has funded multiple projects advancing innovative energy storage technologies, including hydrogen-based storage to address intermittency in renewable generation and provide grid flexibility.
6. Whole Systems Innovation Strategy Projects (NESO portfolio) NESO's innovation strategy includes 15 SIF projects tackling the energy system transition with collaboration across academia, industry, and private sector, many focusing on hydrogen as an enabler for decarbonisation, though individual project details are not fully specified in the sources.

In addition to these projects, funding includes £33.3 million for adapting gas compression units for hydrogen use and £9.9 million for investigating hydrogen fuel for heavy-duty transportation.

Other Notable Projects

• The Digital Platform for Leakage Analytics (DPLA) project, led by Cadent and Guidehouse, aims to develop a system for identifying, locating, and predicting gas leaks in the network using data, analytics, and innovative sensors.

Looking Ahead

Matt Hastings, Deputy Director of the Ofgem SIF programme at Innovate UK, expressed excitement about the Beta projects moving on to demonstrate their energy innovations in the real world. With approximately £49.1 million allocated for projects exploring hydrogen-related technologies, these projects are expected to contribute significantly to the UK's net zero goals.

A third round of feasibility study proposals for the SIF is due to open in the autumn of 2023, continuing Ofgem's commitment to promoting energy network innovation with up to £450 million available over the five-year programme. The funding aims to accelerate the transition to more homegrown, decarbonised energy at the lowest cost to consumers.

For the latest news about the hydrogen market, visit our website. The chosen projects have shown potential for wide adoption and are dependent on meeting key milestones for funding. The projects are led by energy networks and partners in research, technology, and innovation.

[1] Department for Business, Energy & Industrial Strategy. (2022). Hydrogen Strategy: Building a Britain powered by hydrogen. Retrieved from https://www.gov.uk/government/publications/hydrogen-strategy-building-a-britain-powered-by-hydrogen/hydrogen-strategy-building-a-britain-powered-by-hydrogen

[2] SGN. (2022). SGN's Intelligent Gas Grid Programme. Retrieved from https://www.sgn.co.uk/innovation/innovation-programmes/intelligent-gas-grid-programme/

[3] National Grid ESO. (2022). CrowdFlex. Retrieved from https://www.nationalgrideso.com/projects/crowdflex

[4] National Grid ESO. (2022). Whole Systems Innovation Strategy. Retrieved from https://www.nationalgrideso.com/innovation/strategy/whole-systems-innovation-strategy

[5] UK Power Networks. (2022). Heatropolis. Retrieved from https://www.ukpowernetworks.co.uk/innovation/heatropolis/

1. The UK Government's Hydrogen Strategy aims to establish a hydrogen-powered Britain by scaling up hydrogen production and developing regional hydrogen transport and storage networks.
2. Innovate UK's Ofgem SIF programme, through initiatives like the SIF, is supporting projects focused on hydrogen-related technologies to help achieve net zero targets.
3. The Intelligent Gas Grid Programme, backed by Ofgem's SIF, utilizes AI, digital technologies, and predictive systems to create a cleaner, smarter gas network integrated with renewable gases like biomethane.
4. The CrowdFlex project, funded by SIF, investigates the potential of domestic flexibility in managing the electricity grid, promoting grid stability, reducing energy costs, and integrating renewable and low carbon energy sources.
5. Heatropolis, an Ofgem-funded initiative led by UKPN, is researching commercial frameworks for the integration of low-carbon heat solutions, focusing on hydrogen heating and storage opportunities.
6. SIF has funded several projects developing innovative energy storage technologies, including hydrogen-based storage to address intermittency in renewable generation and provide grid flexibility.
7. NESO's innovation strategy includes 15 SIF projects tackling the energy system transition, with many focusing on hydrogen as an enabler for decarbonisation.
8. In addition to hydrogen-focused projects, funding has been allocated for adapting gas compression units for hydrogen use and investigating hydrogen fuel for heavy-duty transportation.
9. Offloading gas leaks identification, location, and prediction using data, analytics, and innovative sensors, the Digital Platform for Leakage Analytics (DPLA) project is expected to contribute to a more efficient and sustainable gas network.

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