The upcoming funding round from the Industrial Strategy Challenge Fund will provide up to £30m to fund detailed designs for future local energy systems. The fund is expected to open in Summer 2019 and anticipates funding around 10 projects starting in 2020. Projects will be expected to run for 24 months.
The fund is targeted at the design of projects to provide solutions that aren’t yet ready to be deployed as a practical demonstrator. There may be a requirement for new regulatory structures and policy conditions and the fund is likely to include a feedback loop with OFGEM and industry code bodies.
The fund is looking to promote projects that facilitate market pull mechanisms rather than technology push. Applicants should consider factors such as pricing signals, incentive structure and regulatory frameworks.
Detailed design initial proposals – What are they looking for?
World-leading smart energy systems designs which focus on a specific UK location. These designs must encompass new business models and market structures that intelligently link supply, distribution, storage and demand patterns across power, heating and transport.
To deliver detailed market designs and technology propositions that effectively integrate and manage energy usage across heating/cooling, power and transport for a specific UK locality, and which can be credibly financed and implemented in the 2020s.
Designs should provide analysis and evidence of
- How the locality can achieve energy carbon emissions below fifth carbon budget levels and provides an aspirational pathway to net-zero carbon.
- A marked reduction in consumer bills, which can be achieved by reduced unit costs of energy and/or demand reduction.
- Market and regulatory arrangements required for the delivery of the design, which have been engaged and tested with Ofgem, Government and other regulators (where necessary).
- Expected job creation and growth in GDP, created by implementation of the design.
- Identification of sites across the UK for replication, and areas of export potential for technologies, skills and expertise globally.
By end of each project, the applicant should have a combined strategy document and business case for the locality that would include the following components:
- Quantified detail of energy generation, consumption and distribution as well as constraints and seasonal/daily patterns.
- Costed business case and investment proposal.
- Options appraisal of favourable technologies that could be deployed to decarbonise, reduce bills, pollution, attract investment etc. It is important to consider the counterfactuals of design option.
- It was highlighted that the development of local energy market structures that will facilitate the delivery of flexible, intermittent, low cost and low carbon technologies is important.
- Demonstrate a consideration of the policy and regulatory conditions needed to deliver the desired market arrangements.
- Detailed project plan (deliverables, milestones, evaluation metrics etc.)
A series of events will be held in May to provide more details and support formation of projects.
Useful links to whole system integration projects