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.
Innovating through ENA
Innovation at ENA is coordinated by key two governing groups, the Electricity Innovation Managers (EIM) and Gas Innovation and Governance Group (GIGG).
Our two 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 innovation work across both electricity and gas.
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 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 Strategy
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.