Bright sparks bag £62m Ofgem funding

Ofgem has handed out the first payments from its £500m Low Carbon Networks Fund. Four projects will share £62m to get their initiatives from the drawing board to the marketplace. […]

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By Kelvin Ross

Ofgem has handed out the first payments from its £500m Low Carbon Networks Fund.

Four projects will share £62m to get their initiatives from the drawing board to the marketplace.

The four funding winners are CE Electric, UK Power Networks, Central Networks and Western Power Distribution.

Ofgem and an independent panel of energy experts felt the winning projects demonstrated a potential to kick start the introduction of smart grids, which is needed to help meet the government’s 2020 targets for reducing carbon emissions.

Stuart Cook, Ofgem’s senior partner for smarter grids, said: “The first year of Ofgem’s Low Carbon Networks Fund saw an enthusiastic response from all of Britain’s electricity networks. Both Ofgem and the independent panel were impressed by the high standard of entries, and the level of ambition in the industry, and we wish to commend all the projects.

“Ofgem has identified that network companies will have to spend £32bn on their pipes and wires over the next ten years to decarbonise the energy sector. The Low Carbon Networks Fund initiatives prove that the companies are grasping the nettle and seeking innovative ways to meet the challenges that lie ahead.”

CE Electric has secured £26.8m for a project in the north east exploring how a combination of smart technologies and changes in customer behaviour can reduce the costs associated with low carbon technologies. The project uses British Gas’ early roll out of smart meters and low carbon products such as solar panels and heat pumps.

UK Power Networks won £24.3m for a “smart city” initiative for London that will explore how to best use new technologies and active network management. The project will seek to understand when, how and why consumers use energy and how this can be influenced.

Western Power Distribution will use its £7.8m funding for a scheme in south Wales which will examine the effect that low carbon technologies have on the network. The trial will help other companies become more efficient by allowing them to anticipate network behaviour and know which solutions have already been proven to work well.

Central Networks received £2.8m for a project in East Lincolnshire which will investigate ways of increasing the amount of electricity generation – mainly wind – that can connect directly to the local electricity network.

Ofgem launched the Low Carbon Networks Fund in August last year. The fund will distribute up to £500m over five years, encouraging and enabling companies to trial new technology which can aid the transition to a low carbon energy sector. Funding of up to £64m is up for grabs each year in the competitive element of the fund and a further £80m is available over the five years to help fund smaller scale projects.

Another £100m is available over the five years as a discretionary award to reward projects which bring particular value in helping the networks adapt to climate change while providing security of supply and value for money to consumers.