Ofgem has awarded up to £58 million (US$77.5 million) to five pioneering projects in the 2020 Network Innovation Competition to help support the transition to a net-zero emissions economy at the lowest cost to consumers.
Winning gas innovation projects include a world first trial of a 100% green hydrogen network for 300 households in Fife to use hydrogen to cook and heat their homes instead of gas.
Electricity projects that have secured funding are aimed at boosting the grid's flexibility to better manage more intermittent renewable generation and surges in demand as well as its capacity, thereby reducing the need for expensive reinforcement.
To meet the government's 2050 target of net-zero emissions, the United Kingdom needs to build a greener energy system that can support a massive increase in renewable forms of generation, charge millions of electric vehicles (EVs), and replace gas boilers by supplying clean alternatives like hydrogen to heat homes and businesses.
Cleaning up heating is a particular challenge. Almost a third of the United Kingdom's greenhouse gas emissions come from central heating and around 85% of households use gas to heat their homes. Innovation will play a vital role in helping to meet the country's climate goals and, in particular, finding the most effective and lowest-cost clean alternatives to gas heating.
As part of Ofgem's current network price controls, companies bid for funding through the annual Network Innovation Competition to test new technologies and approaches that help cut both carbon emissions and costs for consumers. Funding is awarded through a highly competitive process, with assessments carried out by independent panels of experts.
The two winning gas projects are:
- H100 Fife (SGN), awarded up to £18 million (US$24 million): Delivering a first-of-its-kind 100% green hydrogen generation, storage, and distribution network to heat 300 homes. The hydrogen would be manufactured using offshore wind power. Ofgem's decision has triggered a further investment of £6.9 million (US$9.2 million) from the Scottish government.
- HyNTS FutureGrid (National Grid Gas Transmission), awarded £9.07 million (US$12.1 million): Building a hydrogen test facility using decommissioned gas transmission infrastructure to better understand how hydrogen interacts with existing network transmission.
The three winning electricity projects are:
- Constellation (UK Power Networks), awarded £14.38 million (US$19.2 million): Developing new platforms to digitally upgrade electricity substations to better manage variable low-carbon power generation and surges in demand, even when communication links to central systems are lost.
- QUEST (Electricity North West), awarded £7.95 million (US$10.6 million): Integrating standalone voltage control schemes into a single system to create a self-balancing network that unlocks capacity and reduces the need for network reinforcement.
- RICA (National Grid Electricity Transmission), awarded £8.12 million (US$10.8 million): Upgrading electricity transmission towers to carry higher voltages, boosting capacity and reducing the need to construct new overhead power lines.
Jonathan Brearley, chief executive of Ofgem, said: "The high level of ambition shown by bidders in this year's Network Innovation Competition is hugely encouraging and shows the energy industry getting behind the challenge of net zero. The winning projects were those that showed the most potential to make the game-changing leaps in technology we need to build a greener, fairer energy system at the lowest cost to consumers. Ofgem will continue to back the best of innovation, which will help drive the green recovery and enable consumers to reap benefits up to 2050 and beyond."
"The government’s Ten Point Plan has set out a bold ambition for a green industrial revolution that will support a cleaner energy system and allow us to meet our net-zero emissions targets. We must continue driving forward the new low-carbon technologies we need to achieve this and I'm delighted to see Ofgem supporting these projects through the Network Innovation Competition," said Kwasi Kwarteng, energy minister.
Paul Wheelhouse, Scotland's energy minister, said: "The Scottish government provided £6.9 million (US$9.2 million) of funding toward SGN's H100 Fife project and I am pleased that the project has now been awarded additional funding of up to £18 million (US$24 million) through Ofgem's Network Innovation Competition. I see this project as a critical step toward understanding our decarbonization options for heat. It will deliver a purpose-built end-to-end hydrogen system, so I warmly welcome Ofgem's investment in the project."
