Ofgem Strategic Innovation Fund Round 5 Discovery C3

Overview

Delivered by Innovate UK in partnership with Ofgem, the Strategic Innovation Fund (SIF) Round 5 Discovery Phase offers up to £150,000 (excl. VAT) for collaborative projects addressing one of seven energy network innovation challenges—from advanced transmission and dynamic modelling to green gas and whole system optimisation. This is the first of three phases (Discovery, Alpha, Beta), designed to support the development and commercialisation of breakthrough solutions that drive the UK’s transition to net zero at the lowest cost to consumers.

Scope

This competition is delivered by Innovate UK in partnership with the Office of Gas and Electricity Markets (Ofgem). It is funded by the Ofgem Strategic Innovation Fund, which aims to deliver net zero at lowest cost to consumers and support innovative businesses to grow and scale.

Each Round 5 Innovation Challenge as listed in the Strategic Innovation Fund - Round 5 Innovation Challenge document has different aims.

You must select which challenge your Project is working on.

Challenge 1: Advanced Energy Transmission and Networks

Challenge 2: Dynamic Modelling

Challenge 3: High Energy Demand Point Integration

Challenge 4: Consumer Centric Grid Expansion

Challenge 5: Enhanced System Visibility and Control

Challenge 6: Green Gas

Challenge 7: Whole System Optimisation

Your Project must meet the eligibility criteria of the Strategic Innovation Fund (SIF), as stipulated in the SIF Governance Document.

Applicants must demonstrate that the Projects deliver a net benefit to consumers through:

• financial cost reductions, for example, in operating the network, energy bills, users of network services
• emission reduction
• access to revenues for network users
• introducing new products, process and services to the UK energy market

Your proposal must focus on network innovation that can benefit GB energy network infrastructure, consumers, operation, and utilisation.

You must address:

• users and their context
• constraints affecting the problem or wider context
• opportunities for improvement
• environmental impacts

At this stage a Project Direction will be issued for the Discovery Phase only. Successful applicants will be invited to apply for Alpha Phase.

The Discovery Phase of a Project will define the problem and the value in solving it. It will also facilitate a common understanding of consumers’ and network users’ needs from the innovation and identifying constraints.

The Alpha Phase will focus on preparing and testing solutions that are identified during the Discovery Phase, ahead of any large-scale demonstration of the Project in the Beta Phase.

Key themes and topics

Innovation Challenge focus themes

You must select the primary Strategic Innovation Fund (SIF) Innovation Challenge focus theme that your Project is targeting.

Challenge 1: Advanced Energy Transmission and Networks:

• Theme 1: Advanced Semiconductor Technologies for Power Networks
• Theme 2: Superconducting Technologies for High Efficiency Transmission
• Theme 3: Wireless Power Transmission for Grid Flexibility

Challenge 2: Dynamic Modelling:

• Theme 1: Advanced Grid Simulation and Optimisation
• Theme 2: Control Strategies for Coordination and Dispatch of Flexible Resources

Challenge 3: High Energy Demand Point Integration:

• Theme 1: Improving Demand centre energy forecasting and understanding load growth
• Theme 2: Implementing flexibility and efficiency strategies to reduce grid impact
• Theme 3: Accelerating grid connections and infrastructure scaling

Challenge 4: Consumer-Centric Grid Expansion:

• Theme 1: Scalable Technical Innovations for Grid Expansion
• Theme 2: Community Engagement and Public Acceptance Strategies

Challenge 5: Enhanced System Visibility and Control:

• Theme 1: Advanced monitoring and automated grid control
• Theme 2: Enhancing control room operations

Challenge 6: Green Gas

• Theme 1: Network integration and infrastructure readiness
• Theme 2: System Flexibility and Balancing
• Theme 3: Storage and Injection Management

Challenge 7: Whole System Optimisation

• Theme 1: Whole system modelling and scenario analysis
• Theme 2: Development and demonstration of high impact multivector configurations

Any proposed project against the point above must also consider contributing to the key cross cutting areas:

• Customer focussed: the SIF is funded via customer bills; therefore, all projects must ensure the solution is inclusive and accessible to diverse customer and consumer segments through relevant partnerships with third parties, stakeholder engagement and user centric design principles, with the aim of saving customers money
• Scalability and Replicability: developing solutions that can be deployed across multiple regions and scaled to meet future grid need
• Data and digitalisation: harness digitalisation and implement Energy Data Best Practice across all areas
• Shared learning: not all innovation projects will lead to deployment, the learning and how it is shared openly across the energy sector and wider is critical
• Skills and capability: consider throughout the project where upskilling and new capability development is needed and signalling those needs to relevant third parties like academics, training institutes and key supply chain partners
• Supply chains: assess the deliverability and scalability of the solution across the GB network from a supply chain perspective including maturity of supply chains, potential vulnerabilities such as labour requirements, logistical challenges and environmental risks
• Resilience: strengthening the adaptability and security of energy networks to withstand extreme weather events, cyber threats, and fluctuations in energy demand

Project duration

Up to 5 months

Must start after 01 September 2025

End by 30 January 2026

Award value

Up to £150,000 (excluding VAT)

Funding rates

Up to £30 million (ex. VAT) is available for the Discovery Phase across all four challenges. Projects must contribute at least 10% matched funding, with higher contributions viewed more favourably. Additional private or public funding should be considered where appropriate. Final funding decisions rest with Ofgem, who may reallocate funds or apply a portfolio approach to ensure balanced investment across technologies and sectors.

Eligibility criteria

Lead applicant

• Must be an Ofgem-licensed:
  • gas/electricity distribution or transmission network
  • electricity system operator (ESO)
• Must collaborate with at least one other organisation

Project partners

• Must meet specific partner requirements based on challenge and theme
• Must:
  • Be invited to the Innovation Funding Service (IFS)
  • Enter their own project costs
  • Be responsible for at least one deliverable
• Strongly encouraged: SMEs, start-ups, academics, suppliers, disruptors
• Collaborations must be justified with a clear structure

Challenge-specific partner requirements

• Vary by theme across seven innovation challenges, e.g.:
  • Advanced Energy Transmission: partners in power electronics, superconductors, wireless systems
  • Dynamic Modelling: experts in real-time modelling or resource coordination
  • High Energy Demand: demand-side response, forecasting, planning experts
  • Consumer-Centric Grid: consumer representation required
  • Enhanced Visibility: AI, grid automation, digital twins
  • Green Gas: gas blending, control systems, storage
  • Whole System Optimisation: NESO or cross-sector energy modelling experts

Funding and compliance

• Delivered on a 'No Subsidy' basis under the Subsidy Control Act 2022
• EU State aid rules may apply in limited cases (Windsor Framework)
• Lead must ensure all partners remain compliant with subsidy status

Other considerations

• Non-UK partners allowed (self-funded, eligible costs count)
• No funding for work involving sanctioned individuals/entities