Showcasing some of the 40 exciting early-stage projects that secured funding in round 1 of Ofgem’s Strategic Innovation Fund (SIF). The SIF, which is delivered through a partnership with Innovate UK, is a £450 million programme to fund and support projects to drive down UK energy’s carbon footprint at lowest cost to consumers. With Innovate UK’s Matt Hastings, David Richardson and Kate Jones, and featuring Nick Smith from Northern Gas Networks, Michael Eves from SP Energy Networks, and Simon Langdale from Synovate. Find details of the SIF online at www.ofgem.gov.uk/sif

Episode 2 – Off The Starting Blocks

Welcome to episode two of Bright Spark where we talk all things energy network innovation. In the programme we run at Innovate UK, we’ve got two strategic objectives. The first one is to deliver net zero at the lowest cost to consumers and the second, to create the UK Silicon Valley of energy.

The SIF has given us the ability to really embed cutting-edge technology in a way that’s never been done before to really collaborate and really concentrate on the aims and ambitions that we have as the UK around climate change.

Collaboration is a big part of SIF. This isn’t a dating podcast but what did you look for in a partner? [Laughter]

We look for willingness. We look for enthusiasm. What’s their strategy? Where do they want to be in five years? How do they see themselves contributing to the wider industry in five years?

Looking at the portfolio projects, we’re having a look at things that are analogous to the advent of the internet. It’s things that, in 15 years, we can’t even imagine what the services might look like.

[Music flourish]

My name is Matt Hastings. Our Innovate UK team partners with energy regulator Ofgem to deliver the Strategic Innovation Fund or SIF. This time, we are showcasing some of the 40 brilliant and collaborative feasibility study projects from the energy networks and their partners that have won funding in the SIF’s first round. Once again, for this episode, I’m joined by one of my excellent Innovate UK colleagues. In fact, there will be a second one along later too but for now, let’s bring in David Richardson.

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Hello, I’m David Richardson. I’m Head of Innovation at Innovate UK, working on the Strategic Innovation Fund programme. I’m one of the people who is responsible for getting the fund off the ground. My team is responsible for shortlisting the projects and for delivering them once they get funded.

We have just launched 40 projects simultaneously; groundbreaking, big, bold, ambitious projects across our four launch challenges of heat, whole system integration, data and digitalisation and zero-emission transport. I just can’t quite believe that we’ve managed to get to this stage. Ultimately, these are the projects which we’re hoping are going to deliver massive, massive benefits to consumers in terms of cost savings but also in terms of carbon savings.

It’s business time, isn’t it? Finally! Just reflecting on where we’ve come from really, it’s been quite a long journey for you and I to get to this point where we’re seeing projects kick-off and actual innovation getting done is brilliant. It’s a really exciting time. I must say the first response when we got the applications in was possibly one of relief [laughter] when we started flicking through them. I first thought, ‘Oh, we’ve got lots of proposals here,’ and then as I started flicking through, I thought, ‘That’s a good one. That’s a good idea. That’s something that I haven’t thought about before,’ and suddenly, there was a sense of maybe this is all actually going to come together [laughter].

Yeah, it’s funny when you spend so long working on the development of these things to actually start to see them in the real world is just amazing. I think it is worth also calling out that the UK has the potential to be the best place in the world to be an energy consumer, to be the best place in the world to be an energy entrepreneur and it’s really hard at the moment given the external environment. I mean we’ve got a cost of living crisis, we’ve got a war in Europe and we’ve got a runaway climate emergency. It’s kind of hard but really important to be optimistic and positive and get excited about the impact that these projects might be able to have.

Yeah, absolutely but actually, I am very optimistic. It’s a tremendous problem that we have to solve but I think when we look backwards on some of the progress we’ve made so far, the cost of offshore wind just plummeting and solar. I think system integration is going to be the next big one that’s actually something controlling thousands, tens of thousands or millions of distributed devices in an intelligent manner. It seems like a big ask but we’re going to start being able to do that really well and see huge benefits from it and then I think we’ll really start to see some of these economic tipping points being hit where storage becomes much more economically viable. Heating systems that are low carbon suddenly become cost competitive with their fossil fuel equivalents and I think we’re just going to start to see progress at an accelerating rate.

For me, we’re sort of having a look at things that are analogous to the advent of the internet. Nobody got excited about being able to send bits of data between two computers. It was really when Google Maps starts emerging or being able to talk to your brother who lives on the other side of the world via video link and they’re some of the things that these are going to start unlocking. It’s things that, in 15 years, we can’t even imagine what the services might look like at the moment but getting the fundamental infrastructure in place to be able to do so is really going to open the door wide.

Bring it on.

[Music flourish]

So, how the SIF mechanism works is it’s a competition, pretty much, with energy networks and their partners putting forward their innovative ideas together. We’ve got areas of focus which we call challenges and these are the umbrella areas that are judged to be likely to deliver the most benefits to energy consumers and society more widely. We’ll update these in the future but we launched with four initial challenge areas. These are heat, whole system integration, data and digitalisation and zero-emission transport which were chosen as they’re seen as being four of the big themes that we need to solve energy decarbonisation.

The programme is deliberately collaborative and so entries have to come in from the energy networks with partner companies who can bring brilliant ideas. We encourage and reward them to focus on solving the priority areas that we’ve set.

And unfortunately, we can’t showcase all 40 successful bids here and so we’ve put a link to find out more about all 40 in the description for this episode. Here and now though, we have got voices from two of the energy network companies whose projects have been given the go-ahead. Later, we’ll be in Glasgow hearing from Scottish Power Energy Networks on the electricity side but first, a visit to Leeds to the headquarters of Northern Gas Networks. We interrupted the launch meeting of one of their funded projects and asked them to talk about what it means for them.

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Hi, I’m Nick Smith from Northern Gas Networks. I’m the Operational Innovation Lead for Northern Gas Networks and I’m in charge of two of the SIF bids that we’ve been successful with.

Hi, my name is Simon Langdale. I’m a director for a company called Synovate. We’re creating thermal imaging hardware for the inspection of hydrogen pipelines. We use robots to look inside gas pipelines and what we do with these robots is look for areas of interest where we can understand whether the condition of those pipes is suitable for transition to hydrogen which is a zero-carbon gas to allow us to heat our homes without affecting the climate in the same way that current emissions and carbon dioxide does.

We’ve actually just run a Network Innovation Allowance project to develop a product known as Leak Vision which uses thermal imaging capabilities to actually identify and categorise gas escapes from within a pipeline which is, hopefully, going to allow us to improve our investment decisions for our mains replacement projects but also allow us to really improve our efficiency in terms of repairs for leakage as well; so reducing methane emissions, reducing required excavation size and material to landfill.

For Synovate, it’s really fantastic to work with Northern Gas. They’re a brilliant innovation company. They’ve been able to embed complex robotic systems within their operational teams which is a real first for the UK gas networks. So the SIF is a fantastic mechanism to enable us to collaborate with Northern Gas Networks and it’s an opportunity for us to really collaborate in an area that we’re particularly passionate about which is climate change. The SIF has given us the ability to work with Northern Gas to really embed cutting-edge technology in a way that’s never been done before to really collaborate and really concentrate on the aims and ambitions that we have as the UK around climate change. Success, from Synovate’s perspective, really looks like being able to have a much more cost-effective and speedy transition to hydrogen to really push out natural gas. It’s been a fantastic product and it’s kept our homes, business and schools – all that good stuff – warm but now we’re going to transition to hydrogen and the quicker that we can make that happen, the much, much bigger the positive impact on the environment will be. So success for us really looks like being able to help Northern Gas Networks speed that process up in the quickest and safest way possible for UK gas consumers.

It’s about enabling local innovative businesses as well. As you know, Northern Gas Networks works in the North, Northeast and very high Northwest of England and so working with a company like Synovate, based out of Harrogate, is fantastic for us as a local business in really enabling local innovation as well.

So we’re very, very happy to have won the SIF bid. It’s a fantastic achievement. It’s a very prestigious award and that’s a testament to the amount of work that we’ve had and support that we’ve had from Northern Gas Networks in terms of the submission and being able to bring all that information together in such a succinct way that we’re able to demonstrate value. We’re very, very happy and we’re very hopeful that this SIF and this mechanism can really present some great benefits and great opportunities for UK PLC in terms of the technology that we can develop and deploy in collaboration with Northern Gas Networks.

We’re very excited for the challenge and we’re raring to get going. It’s been a fantastic day kicking off the project today with Northern Gas Networks and we will have a little celebration tonight when we get home before we get stuck into all the hard work.

I’m extremely pleased that these projects are now in a position to kick off. It’s been something, particularly for myself, that this one that we’re doing with Synovate is offering a lot of potential and has got a lot of future benefits for not only NGN as a business but for our customers and, like I say, for our local community. It’s great, again, that we can work with local innovators within our own area and within our own network, who we already have a great relationship with, and be able to exploit each other’s expertise.

[Music flourish]

Thanks and congratulations to Nick Smith from Northern Gas Networks and Simon Langdale from Harrogate-based robotics experts, Synovate. That was one of five projects that Northern Gas Networks have been successful with in the first round of the SIF. It’s just one example of the innovation, passion and ingenuity that they have shown during their approach.

I’m David Richardson. You’re listening to Bright Spark, our podcast about energy network innovation, delivered by the team at Innovate UK, which showcases the brilliant work being funded by the Strategic Innovation Fund that we run in partnership with Ofgem. To find out more about the Strategic Innovation Fund, head online to Ofgem.gov.uk/SIF. That link is also in the episode description in your podcast player.

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We’re leaving Leeds now and heading even further North to Glasgow and the headquarters of SP Energy Networks or SPEN. They actually had nine successful bids in total. I’m going to hand over to one of my Scotland-based colleagues, Kate, to talk a little bit more about them.

Hello, I’m Kate Jones. I am one of the Innovation Leads at the Strategic Innovation Fund. What does that mean? I’m here to help deliver some of the projects as quickly as possible and to the best value for consumers.

So we are outside your headquarters in Glasgow City Centre. There’s lots going on today with lots of construction, lots of new buildings, old buildings and lots of traffic. Out the front of the building, we’ve got the climate stripes. Can you tell me a bit more about that?

Yeah, it’s amazing to see, in the last 50 years, what went wrong.

That probably leads us on quite nicely to congratulations. SPEN has been the biggest winner on the electricity side with nine projects. Are you celebrating?

We celebrated. We’re now in delivery but we’re really pleased to get all nine. There were a lot of late nights. There was a lot of sweat and tears trying to put these things together. Because it’s a new mechanism, there’s always been a lot of back and forth trying to figure out what to do there but these are nine projects we really believe in and these are nine things we know that need to be accelerated with innovation funding to overcome the risks. So we’re pleased but I think we’re past celebrating now [laughter]. We’re on the other side of that.

So you had projects across the four challenges. I’m personally really interested in heat and vulnerability and I know that we won’t meet the carbon targets unless we resolve some of the heating challenges. Especially at the moment, there’s a lot of uncertainty around energy prices and the potential for fuel poverty to increase. What is it about those projects that you like most and what do you hope to achieve from them?

We were really pleased to be, I believe, the only electricity TO to have heat projects in that and, again, they’re topics that we’re really behind. Both our heat projects are quite complementary because they consider both really large-scale thermal storage and the impact that could have on much more interseasonal capacity there; whereas, our more domestic project, Flex Heat, is looking at some of that more domestic uptake. I think with the decarbonisation of heat, we all know that needs to happen but it seems to be that after EVs, some of the uptake technology around the decarbonisation of heat needs to be moved at pace and we now need to really be getting behind that. On your second point about consumer vulnerability, certainly, that’s something that we see being across the nine. There are some direct benefits and some more indirect but I think consumer vulnerability is a theme. That’s been something that’s been great to see as a much more prominent part of RIIO-2 in the innovation space. This is something we work really close on with our customer service colleagues just making sure that we both think ahead about what needs to happen in a year’s time but also what we do right here and right now to look after those who need to be looked after. Certainly, that’s something that I have a bit of an ownership of, as part of the team, are those colleagues and how our innovation strategy has a focus on consumer vulnerability and there are real things we want to do there.

Collaboration is a big part of SIF and you’ve got a number of partners involved in the nine projects. This isn’t a dating podcast but what did you look for in a partner?

Oh, dear [laughter]. With partners, we look for willingness. We look for enthusiasm. I think one thing we always look for in our partners is what’s their strategy. Where do they want to be in five years? How do they see themselves contributing to the wider industry in five years? Certainly, what we’ve been really pleased to see from the partners that are working with us has been genuine enthusiasm, willingness just to crack on and get things done and also real level-headedness and thinking, ‘We’ve got Discovery and we have eight weeks. What are we going to do in that eight weeks?’ But it’s also looking ahead to the next phase and saying, ‘Where do we want to get to? How are we going to do that? What’s the best way we can work together? What are my skill sets?’ There’s a real proactive approach with our partners and it gives us a lot of comfort that we’re going to get this done well.

So we’ve got the goods and services that will come out of the innovation projects but what about the data and digitalisation aspects? You’ve got a couple in the data challenge.

Oh yeah!

What do you hope to achieve out of those projects?

Well, certainly, in terms of what we want to get out, there’s also the question of what data we need to be taking in. A lot of what we’re trying to do is better forecasting and some better analysis. So a lot of it is about the data we might produce but actually, a lot of it is recognising what data we need from our network. What data do we need from third parties? One of our projects is called Predict4Resilience. What we’re trying to do there is actually better forecast weather and its impact. You’ll be aware of a lot of the recent storms that we’ve had recently and certainly, there’s a real need to always be looking at what we can do better in terms of our forecasting capability. The great thing we have with that project is looking at how it can directly impact our network and what faults might arise from those weather patterns.

Yeah, there’s a lot of change coming with the weather but also in terms of the heat stuff that we spoke about and the transport side of things. Glasgow is quite a big transport hub. We were talking about some of the weather changes and there’s actually going to be a lot of change for us in our day-to-day lives as we go towards net zero. How do some of your transport projects look at how transport will change for us?

The key thing that we’re looking at in transport is the rail side. One of the things we’ve looked at is how we can strategically be working with Network Rail and other partners to make use of what is a very large electrical network of traction. So what we’ve done on those two projects is looked at and asked what the decarbonisation of the railways looks like and what the decarbonisation of the railway stations looks like. We’re looking at hydrogen options and we’re looking at more additional electrifications happening just now at higher voltages. We’re also looking to introduce other electrification technologies such as battery storage and power electronics and just doing a genuine comparison to see how that works as a holistic solution to the decarbonisation of the railway. In terms of the railway stations project, we’re very aware again that a lot of these different railway stations are introducing different low-carbon technology solutions like putting solar panels on their roofs or electric vehicle charging points. What you’re starting to create there is actually a much more intelligent hub rather than just a passive railway station and the thought being that it’s not just as a single, stand-alone solution but if you start to have a combination of these working together and have an intelligent control behind that, do you actually have an opportunity to have a real network of intelligent micro hubs across the country that are able to provide flexibility and other services?

One of the key parts of SIF is carbon reduction. Can you talk about your project that’s focusing on environmental benefits?

What we’re talking about is the ARC project (Asset Reuse and Recycling). It’s not just about carbon reduction but it’s actually looking more holistically at sustainability. With the assets that we use at the end of their lifetime, is it right that those assets should be going to be scrapped? How can we better maybe use some of those assets? Certainly, we’re very mindful that there are safety aspects about how some of those assets will be and that’s been heavily factored into this but we’re aware that there will be an opportunity for a circular economy to come to some sort of fruition with solutions there.

Are you saying that we’re going to have garden furniture that are transformers?

I’ve seen people already having upcycled ceramic insulators being sold in antique shops, so never say never. I think the idea is about whether these can be used elsewhere and still have some sort of life function or support. Certainly, if somebody opens up an upcycling venture... never say never, right?

This might be choosing your favourite child but which is your favourite project and why?

You very much have asked me to pick my favourite child and like any good dad, I will not do so. What I will say is I believe in all nine and I genuinely do. The thing that we’re looking at just now is saying, ‘How can all my kids be aligned?’ So, certainly, we’ve got nine discoveries just now and it’s thinking about saying, ‘What are the alignments that these have to each other? Can these be streamlined? How can we do so in an effective manner and make sure that we’re not delivering nine bespoke solutions but we’re delivering towards an aligned portfolio that is supporting the entire network and the innovation programme?’ On top of that, we’re also looking at how we can be aligned with others as well and certainly making sure that we’re not only aligned with ourselves but actually, other projects from other companies. I think that’s a really important thing that we do and we take it on proactively as well. But the criticality of our investment reflects the part to play that we have as a network operator inside and getting ourselves to net zero, not just as networks but as the UK. That is something that we truly believe in.

[Music flourish]

Thanks to my Innovate UK colleague, Kate Jones, and SP Energy Networks’ Michael Eves who is based in Glasgow. What a cruel question from Kate asking Michael to pick his favourite child. All these early-stage projects are, of course, hoping to prove their ideas and go on to future funding in later phases of the SIF. Though, of course, some may not. Success is only part of the narrative as I’ve been discussing with Matt.

Now I’m going to ask you a provocative question here. We’re going to talk about the ‘F’ word. Failure. How important do you think failure is in innovation and do you feel it’s a dirty word or is it a good word? Is there such a thing as good failure and bad failure?

I think the mantra nowadays is that failure is good. In general, you always learn something from it but there’s a difference between people acknowledging that failure is a good thing and actually putting that into practice. Really, I think we need to do a little bit more to celebrate when people put their hands up and say, ‘We tried something. It didn’t go the way that we were hoping or expecting but we’ve learnt a lot here.’ Particularly, with energy system pathways, we’ve got a number of routes to reach our end goal of a net-zero energy system and really, we need to start breaking down these routes so that we do get to the end of the journey as quickly as possible. Particularly in the SIF, blocking off some of those roads and saying, ‘We tried that. It didn’t work for good reason,’ is going to be immensely valuable as well. Matt, obviously, a key feature of the Strategic Innovation Fund is that it is competitive. What do you think the importance of that is?

Yeah, I mean this is a competition and I think the reason why we’ve made it competitive in its nature is that we are obsessed with quality. We want the absolute best. There are some programmes that Innovate runs... and the same with other programmes like Horizon in Europe where they’re so competitive that the amount of effort required to actually secure funding is relatively disproportionate in terms of the percentage of chance that you’ve got of securing that money. I think we’ve found the right balance with the SIF, whereby, we’ve actually got a very lean application process. There are ten questions with 400 words per answer and a few appendices. Actually, the strike rate of being successful with SIF Discovery is in the region of 70-75%. There’s quite a high strike rate. So it’s competitive whilst not being completely in the realms of the impossible as to whether or not the projects are going to get funding. I also really like that competitive dynamic where it’s actually trying to foster and develop new teams. As we move through the different phases, whilst they start competing with each other, it may well be as they move from Discovery into Alpha that they can start to collaborate and actually become one larger project instead of two smaller ones. I do feel quite strongly that the capability required to solve some of these challenges really needs diverse teams with different sets of skills and different sets of experiences. Competitors can be collaborators and vice versa.

One of the things for me there is people may not realise at this point but what you’re competing for is not simply a wad of cash. There’s access to policymakers and regulators so that we can start putting these ideas into action. There are the relationships we’re going to form with international utilities and commercial arrangements to get investment. What I’d like to see by the end of the first set of Beta projects is that people are competing because they know that if you make it through three rounds of the SIF, you’re in a prime-time position to be launching your energy innovation, both nationally and internationally. It will just take off from there.

Yeah, completely. It’s competing for commercial value, consumer value and business value rather than just competing to get some funding to do a project, isn’t it? I completely agree with that. Great point.

[Music flourish]

Huge thanks to everyone whose voices we’ve heard this episode. Nick Smith and Simon Langdale in Leeds, Kate Jones and Michael Eves in Glasgow and, of course, David Richardson for being my co-presenter this time around. My name is Matt Hastings. Bright Spark is an Innovate UK podcast all about the brilliant work being supported under the umbrella of Ofgem’s Strategic Innovation Fund. There are short, one-minute promotional films for all 40 projects funded in the launch round on the SIF on YouTube. Search Ofgem SIF to find them. To find out more about the Strategic Innovation Fund, just head online to Ofgem.gov.uk/SIF. We’ve also put that link in the description that accompanies this episode in your podcast player.

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Bright Spark is a Bespoken Media Production for Innovate UK in partnership with Ofgem. Thanks for being with us. See you next time.

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