A new £450 million fund to support greener innovation to heat homes and businesses, store energy or transport goods and people across Britain has been launched by Ofgem.

It is part of the regulator’s RIIO-2 price controls for the electricity operator and network companies that operate energy pipes and wires and will support the UK’s drive towards net zero emissions by 2050 while lowering energy bills for consumers.

The funding will initially be available over the next five years, with the option to increase it in response to need and if innovators bring forward “strong plans”.

Network companies, system operators, businesses and researchers can bid for the funding to help accelerate the transition to an emissions-free energy system.

For the first round, network companies must address four challenges that are crucial for the energy transition – whole system integration, data and digitalisation, heat and transport.

Projects can include the rollout of clean heating technologies such as heat pumps and new technologies for networks to support flexible energy solutions such as battery storage.

Jonathan Brearley, Chief Executive of Ofgem said: “What we need more than ever to reduce greenhouse gas emissions and reach net zero is innovation.

“The Strategic Innovation Fund means cutting-edge ideas and new technologies become a reality, helping us find greener ways to travel and to heat and power Britain at low cost. Britain’s energy infrastructure will play a pivotal role in cutting net zero greenhouse gas emissions and this fund will help make sure our energy system is ready to deliver that.”