The UK’s Energy Minister has recently assured network operators that the government has made supporting energy network innovation a “top priority.”

Ofgem review 

Utility Week writes that in December, UK energy regulator Ofgem launched a consultation on the future of network innovation allowance (NIA) and network innovation competition (NIC). The NIA and NIC are government funding mechanisms designed to support energy network innovation. Some respondents argued that by not making provisions for projects which fail, the NIC is limiting innovation.

Following the consultation, Ofgem recently announced that this summer it would conduct an in-depth review of the NIA and the NIC. Via an open letter to the energy industry, its regulator said the review will examine whether “substantive changes” are required. Ofgem will publish its conclusions at the close of 2016, so it can bring any necessary policy changes into effect in time for the 2017 innovation competition, a contest designed to deliver new solutions to pressing energy network matters.

Addressing network innovation

UK Energy Minister Andrea Leadsom also recently addressed the subject of energy network innovation. Speaking at a Ministerial Summit in Leeds, Leadsom was quoted by Utility Week saying that Whitehall is “determined to allow the innovation to happen, there is absolutely no desire to go back to a place where there is no innovation and there’s complete discouragement.”

Leadsom was in Leeds to learn about an NIC-funded project, which is designed to convert the Northern metropolis from natural gas to hydrogen via a CNG plant. The company behind the project, gas distribution operator Northern Gas Networks (NGN), recently argued that the initiative would have never come to fruition without support from the NIC mechanism.

Essential for SMEs

Mark Horsley, the Chief Executive of NGN, commented on the subject of the NIC. Horsley argued that considering the fact it supports not just network operators but thousands of UK small to medium sized enterprises, it is “too early” to reduce this vital funding. Elaborating, the NGN Chief Executive said:

Over 1000 SMEs are connected to us through the NIA and NIC… [without the NIC] The CNG plant that we are developing in Leeds probably wouldn’t have happened. It creates a mind-set. I just think it’s too early in that development now to cut that funding. It needs to go further until it really does become business as usual.”

In this rapidly changing world, energy network innovation is key, as it provides solutions which allow the UK to power its economy more effectively. As Horsley suggests, SMEs have served as a major driver of energy network innovation. Therefore it is vital that these businesses receive funding through mechanisms such as the NIC and the NIA which they can utilise to support innovation.


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