Our approach is to identify emerging technologies and opportunities that increase the efficiency of operations, enhance overall safety, provide a reliable network and help to meet our net zero targets. Innovation funding is critical for promoting innovation and developing new and existing technologies. Current mechanisms are:
Network Innovation Allowance (NIA)
As part of the RIIO-1 price controls, Ofgem introduced the Network Innovation Allowance (NIA). The NIA is a set allowance each RIIO network licensee receives as part of their price control allowance.
The NIA provides limited funding to RIIO network licensees to fund smaller technical, commercial, or operational projects directly related to the licensees’ network that have the potential to deliver financial benefits to the licensee and its customers.
Network Innovation Competition (NIC)
As part of the RIIO-1 price controls, Ofgem introduced Gas and Electricity Network Innovation Competition (NIC).
The NIC is an annual opportunity for network companies to compete for funding for the development and demonstration of new technologies, operating and commercial arrangements. Funding is provided for the best innovation projects which help all network operators understand what they need to do to provide environmental benefits, cost reductions and security of supply as Great Britain (GB) moves to a low carbon economy. Up to £70m per annum is available through the Electricity NIC, and up to £20m through the Gas NIC.
Future Innovation Funding
The next RIIO price controls (RIIO-2) start in April 2021 for Electricity Transmission, Gas Transmission and Gas Distribution licensees, and April 2023 for Electricity Distribution licensees. Details on innovation funding will be added here once the mechanisms are confirmed, but initial indications are that NIA funding will be retained, and there will be a new Strategic Innovation Fund (SIF) as a replacement to the RIIO-1 NIC.
Innovation at ENA
Innovation at ENA is coordinated by key two governing groups, the Electricity Innovation Managers (EIM) and Gas Innovation and Governance Group (GIGG).
These working groups meet regularly and contribute to successful delivery of innovation projects, minimisation of project duplication and dissemination of learning. Their collaborative work as a joint group (EIM GIGG) further facilitates cross-vector innovation work.
EIM GIGG have jointly created an ‘Energy Networks Innovation Process’ (ENIP) to explain how innovation projects are delivered and how third parties can get involved. This document also fulfils Ofgem’s RIIO-2 price control requirements for enhanced industry-led reporting and collaboration processes.
Energy Networks Innovation Process (ENIP)
ENIP is our guide to network innovation. The ENIP comprehensive document contains the full details of the end-to-end industry led process for reporting, collaboration, and dissemination of Ofgem funded NIA projects in Great Britain. A set of associated ENIP appendices are available as a zip folder in support of the comprehensive document.
Alongside guidance for third parties who wish to participate in projects, ENIP includes our Innovation Measurement Framework (IMF). The IMF has been developed to enable the networks to consistently report on a range of innovation outcomes, including collaboration and partnerships, the speed at which successful innovation is transitioned into BAU and the benefits innovation has delivered for network customers.
Energy Network Innovation Strategies
As a part of the Transmission and Distribution Licenses, the electricity and gas networks are required to produce a joint innovation strategy. Take a look at the latest Energy Network Innovation Strategy.
We have coordinated the development of these strategies on behalf of the networks. The strategy documents set out our high-level ambitions and priorities for network innovation, and will be updated at least every two years. You can find previous energy network innovation and other related strategies on our publications page.
Innovation databases (portals)
You can view our innovation databases in the Indusry hub.
Smart Meters are installed in customers’ homes and businesses, replacing traditional meters which have to be manually read. Smart meters provide a range of advantages. They are connected to our energy distribution networks, but it is the responsibility of energy suppliers to procure and install them. We are supporting the roll-out of smart meters in several ways:
- handling network equipment defects that prevent the new smart meter from being installed
- providing helpful material to energy suppliers and meter operators on the correct procedure for successful gas smart meter installation and common failure modes that cause post-install gas escapes
Network Operators use the smart metering system and data where it adds value to network customers, assists with smart grid functionality and refines network planning models. Most benefits are generated by the electricity networks in improved design and services.
- Accurate power-off time and power restored time.
- Automatic power outage compensation payments.
- Faster fault restoration.
- Improved remote supply status checks.
- Proactive identification of supply quality issues, such as intermittent faults or voltage.
Network Design and Planning
- understanding of loading on the local electricity networks serving DNO customers.
- adapting networks to meet changing energy needs of customers (Solar PV, heat pumps, electric vehicle charging).
- minimising costs of network upgrades.
The level of benefits depend on the reliability and effectiveness of smart meter system functionality working as originally planned.
Electric Vehicles & Heat Pumps
Decarbonisation is changing our energy system rapidly and the way in which energy is produced, supplied and consumed is already very different from only a few years ago. The pace of change we are seeing is set to accelerate as take up of new technologies such as Heat Pumps and Electric Vehicles increases, and consumers exercise greater choice and control over the way in which they use energy. Electric Vehicles and Heat Pumps have a strategic role in reducing greenhouse gas emissions and are a key component of the transition to net zero. We unanimously support this transition and are investing in our networks to ensure that they can safely and reliably meet the increase in electricity demand required to support these technologies. Visit our Connecting to the networks page, for everything you need to know about connecting your Electric Vehicle and Heat Pump to the electricity network, including how to ensure your connection is adequate.
Hydrogen will be at the centre of the net-zero emissions energy system, providing a flexible, storable source of energy with no carbon emissions at the point of use. By using our extensive gas network infrastructure to transport hydrogen in place of methane, we can deliver a cost-effective approach to decarbonisation which works in the interests of consumers.
We are working together to evaluate and provide technical, safety, quality and financial evidence to demonstrate the viability of using Britain’s gas networks to transport and distribute hydrogen through existing and new pipes. Developing hydrogen infrastructure is vital to meet the UK’s net-zero emissions target, and network innovation is delivering the evidence we need to transform our energy system and supply hydrogen to domestic, industrial and transport customers.
Through the Gas Goes Green project the Gas Networks are committed to maximising the opportunities to use hydrogen and other renewable gas sources and are working with stakeholders, trade associations, the Regulator and Government to progress this and remove any barriers to entry, both regulatory and financial where possible.
There are several forms of renewable sources of gas including biogas which is produced by the decomposition of various organic materials e.g. household refuse, sewage sludge and agricultural waste. Another type is bioSNG made from gasification of dry materials. This alternative fuel source represents an affordable and renewable solution for space, water and process heating, if injected into the gas network, without the need for changes to infrastructure or appliances whilst also potentially reducing the amount of waste sent to landfill.
Through the Gas Goes Green project the Gas Networks are committed to maximising the opportunities to use biomethane and other renewable gas sources and are working with stakeholders, trade associations, Ofgem and the government to progress this and remove any barriers to entry, both regulatory and financial where possible.
While electricity generation is transitioning to renewable sources, gas in personal vehicles could provide an easily adoptable, sustainable solution before personal transport is electrified.
Gas could also provide the ideal solution for fleet vehicles due to the refuelling arrangements and distances that can be travelled. It is the only sustainable option for HGVs as these cannot run on electricity due to the size of battery needed.
Benefits of gas-powered vehicles include:
- The cost of natural gas is significantly lower that oil and hence can provide a large saving to the UK economy
- Gas in vehicles provides noise and pollution benefits compared to oil
- The extensive UK gas grid provides easily available supply to users
- Gas is abundant and is becoming renewable with the introduction of biomethane into the grid
- Gas in vehicles could provide up to a 20% reduction in CO2 emissions in the transportation of goods in the UK (CNG Services)