Ofgem and Innovate UK have announced preferred topics for the second round of funding under the Strategic Innovation Fund (SIF). Applications will be accepted from early September.

A five-year programme with up to £450 million available to promote energy network innovation, the SIF aims to identify and fund projects with potential to speed progress to Net Zero at the lowest cost to consumers.

Four areas have been identified as priorities.  Across a focus on transport, heat, data and integration across the whole gas and electricity system, they are:

  • Supporting a just energy transition – including new ways to identify and support vulnerable customers, and help those who are disadvantaged, fuel poor or off the gas grid to reduce heat and mobility carbon emissions
  • Preparing for a Net Zero power system – including new ways to support low-stability systems, and to use new sources of supply and demand to help manage grids
  • Improving energy system resilience and robustness – including ways to develop multi-energy systems and make them more resilient, and strengthening energy system robustness so that new infrastructure can be rolled out efficiently
  • Accelerating decarbonisation of major energy demands – such as ways to manage and integrate large-scale demands from heat and transport, integrating heat networks for wider energy network management, and improving energy efficiency at all levels in the system.

Now the challenge areas have been identified, the programme will open an initial ‘discovery’ phase, whereby innovators working with energy companies can apply for £150,000 to further develop their ideas.

After the discovery phase, those projects judged to have the greatest potential will be awarded up to £500,000 to further develop their ideas. Another selection process will follow, with successful projects receiving more funding and able to carry out large-scale demonstrations of their technologies. The aim is to develop innovations which can be rolled out across all UK energy networks, making them fit for the future and delivering benefits for both consumers and the planet.

Neil Kenward, Ofgem’s director for strategy and decarbonisation, said:

“Ofgem set up the Strategic Innovation Fund to harness the power of innovation to help accelerate a fair, affordable and inclusive transition to low carbon energy.

“The challenge areas announced today address some of the most pressing issues on this journey, and we encourage energy networks and innovators to consider how they can develop the best ideas with the greatest potential for this yeaAt Innovate UKr’s competition.”

At Innovate UK Matt Hastings, its deputy director of the Ofgem SIF programme, said:

“We believe we can make the UK the best place in the world to be an energy entrepreneur.

“The first round of the SIF produced 40 innovation projects across a wide range of themes, showing that the sector is ready to join in this ‘giant leap together’ to decarbonise the energy networks.

“With the next challenge areas now clear we expect that many dynamic new collaborations will form this year, as energy networks get together with other innovators – inside or outside the energy sector – to take part in the SIF.”

A public briefing webinar on 25 May 2022 will explain more about the innovation challenges and how the next SIF competition works.

Innovators wanting to partner with network companies on projects should attend the competition launch webinar to find out more.

More information is here. Sign up link here.


  1. A very large source of fossil carbon free energy in the UK is biomethane produced by processing the millions of tons of organic waste, including sewage, produced each year, in an anaerobic digester. The biomethane can be fed into the local gas grid to replace the fossil carbon natural gas, or it can power a solid oxide fuel cell to produce green electricity. The technology is well known and proven so no research or development is needed, just the capital to invest in the plant.


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