Ofgem has today approved £45.5 million for five innovative projects which aim to help make the electricity distribution network smarter and meet the challenges of moving to a low carbon economy.
The funding comes from the LCN Fund which is now in its third year. The fund supports projects which display the potential to accelerate the development of a low carbon energy sector, provide value for money to customers and deliver financial benefits to consumers.
This year’s successful projects involve:
• ways to make the connection of distributed generation (such as local solar panels and wind turbines) cheaper and faster,
• managing the impact of distributed generation on the network cost effectively
• managing the network more efficiently by controlling voltage
• an intelligent socket to control the charging of electric vehicles, reducing stress on the network at peak times
• examining the most cost effective use of batteries for storing electricity.
Hannah Nixon, Senior Partner for Distribution at Ofgem said: “The energy mix and technology is changing and the way networks operate has to change too – that’s why Ofgem set up the ground-breaking LCN Fund three years ago.
“By promoting investment in innovation now we can help avoid problems and expensive fixes in the future.
“The first projects are starting to provide valuable learning. This is being shared across the industry and more widely, which is one of the main objectives of the scheme. While it is still early days for the LCN Fund it is clear there is excellent progress being made.”
An independent expert panel advised Ofgem on the projects. It assessed the projects against criteria that ensure they have the potential to deliver value for money to consumers. Through this review process, the panel challenged costs and scrutinised how well the projects matched the scheme’s criteria.
These include a need for there to be clear benefit for distribution customers. Following the review process, five projects were approved. Two further projects, while being seen to be innovative, did not sufficiently fulfil the criteria and were therefore not eligible for the final funding award.
The five winning projects are:
* Electricity North West (£7.2m): Investigating how reducing voltage on the distribution network can reduce peak demand
* Scottish Power Distribution (£7.4 m): Trialling a holistic approach to the connection process for distributed generation to tackle barriers to timely connection
* Southern Electric Power Distribution & EA Technology (£4.2m): Trialling a technology that will allow a cluster of electric vehicles to re-charge without stressing the distribution system and trial the delivery of a network project by a third party
* Eastern Power Networks (£13.2m): Investigating the optimisation of a range of battery services with the aim of improving the economics of storage.
* Western Power Distribution (£13.5m): Investigating, measuring, monitoring and mitigating Fault Level, a technical issue that can limit the connection of distributed generation. If successful this could allow for cheaper and quicker connections.
The two projects which did not receive funding were Northern Powergrid’s GB Flexibility Market project and Scottish Hydro Electric Power Distribution’s PATHS project. Ofgem and the expert panel thought that PATHS was an innovative and potentially important project.
However, Ofgem and the expert panel had concerns over the proportion of benefits and risks that could be attributable to electricity distribution customers compared to the funding that they would contribute to the project.
The GB Flexibility Market proposal was deemed innovative with real potential to deliver benefits. The project did not sufficiently demonstrate that it would adequately deliver against the value for money criterion. In particular, there were concerns about costs of contractors and the process followed to select them.
In addition, there were concerns about the allocation of costs across the parties that would receive benefits from the project. However, it was acknowledged that the value of a project in this area and would encourage submissions covering this in future years.