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Ofgem is driving innovation improvements across the electricity and gas sector by funding six new projects through its Network Innovation Competition (NIC).

The projects include testing how ‘greener’ gas can be used on a university’s gas grid in Staffordshire, and examining how advanced software can help make more efficient use of locally-connected solar power.

Britain needs gas and electricity networks to become smarter to manage the transition to a low carbon economy at the lowest possible cost for consumers. Each year Ofgem calls on network companies to compete for funding where they trial new approaches and technology which will pave the way for smarter grids.

In this year’s competition Ofgem has agreed funding of £44.6 million for six of the eight projects that entered (four for electricity and two for gas).

Jonathan Brearley, Senior Partner, Networks, Ofgem, said: “Britain’s networks will play a crucial role as we head towards a smarter energy system. 

“This year’s trials will test a variety of new technologies and arrangements. If they are successful they will provide networks with valuable learning that may be incorporated into their everyday working practices, providing financial and environmental benefits to consumers. 

“We want network companies to work closely with non-network organisations so that more ideas can be developed through collaboration. I’m pleased that some of this year’s projects are doing that and look forward to seeing more collaborative projects coming forward next year.”  

The winning projects involve:

• Examining what role hydrogen can play in gas networks by testing the use of natural gas blended with 10% to 20% hydrogen on Keele University's gas network which supplies its campus and student accommodation buildings. The higher hydrogen content means the gas is less polluting. From National Grid Gas Distribution.
• Using cloud-based software to allow local communities to make more efficient use of locally-connected renewable energy. From Western Power Distribution.
• Using new types of circuit breakers to ease faults on the network which could help smaller generators connect in areas such as London. From UK Power Networks.
• Testing whether small scale distribution-connected generators can provide services to the national network, such as voltage stability, that are traditionally offered by larger generators. The project will also test how distribution network operators and National Grid can work more closely on managing grids, which is an important part of building a more flexible energy system. From National Grid Electricity Transmission.
• Trialling new equipment which will regulate frequency and voltage on the grid in response to variable output from wind farms. This will help squeeze more capacity out of the grid as this technology makes it easier for these generators to connect. From Scottish Power Transmission.
• Developing a new billing system to adapt to the next generation of gas sources on the networks. It will take into account that ‘greener’ gas such as biomethane produce different levels of energy compared with North Sea gas. From National Grid Gas Distribution.*

Notes to editors

1. Ofgem’s Network Innovation Competitions for electricity and gas were set up as part of the RIIO (Revenue = Incentives + Innovation + Outputs) price controls for electricity distribution, gas distribution and gas and electricity transmission. The first competition was in 2013. Network businesses compete for funding each year to carry out trials. They recoup the spending as part of the network charges all customers pay. Expert panels evaluated the competition submissions and made a recommendation to Ofgem on which projects should receive funding. The NIC is the successor to the Low Carbon Networks Fund.
2. Our decision documents.

• See our Gas NIC decision.
• See our Electricity NIC decision.
• See the full list of successful projects.

*While we have awarded this project funding, it is subject to National Grid Gas Distribution (NGGD) accepting an additional condition that we have imposed to ensure it delivers good value to gas customers. NGGD may choose not to progress this project on these terms. We are working with them and a decision is expected by the end 2016.

About Ofgem

Ofgem is the independent energy regulator for Great Britain. Its priority is to make a positive difference for consumers by promoting competition in the energy markets and regulating networks.

For facts, figures and information about Ofgem’s work, see Energy facts and figuresor visit the Ofgem Data Portal. 

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Further information for media

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