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SP Energy Networks to help ‘future-proof’ UK electricity supply with awards for innovation


We are delighted to confirm that we have secured regulatory funding for three ground-breaking projects which will accelerate delivery of our smart and flexible energy system for customers.  

With the significant cost of upgrading the electricity network ultimately borne by customers, we are developing new technologies and innovations to optimise existing infrastructure instead. This will ensure a smart electricity grid which will be capable of coping with rising demand for power to charge electric cars and other low carbon technologies.

Ofgem, the UK’s national energy regulator, is backing our projects with £20.6m funding to demonstrate how both commercial and technical innovation can deliver a flexible electricity system focused on local customers, communities and businesses.

Traditionally, the UK's electricity network has been largely based on 'one way' supply with electricity generated by a small number of large power stations.

But the rise in demand for power for electric vehicles and other low carbon technologies like heat pumps for homes, coupled with an upsurge in customers wanting to connect their own renewable energy sources (including wind and solar power) to the network, has led to a pressing need for the UK to develop a smart grid fit for the 21st Century.

Colin Taylor, Director of Processes and Technology at SP Energy Networks, said: “The increasing take-up of electric vehicles, for example, will cause a considerable load strain on local networks. It is estimated that there will be 9.7 million electric vehicles on British roads and 9.1 million heat pumps in British homes by 2040. We are planning and implementing an appropriate and flexible response to that increasing demand now.”

Our LV Engine project will demonstrate the deployment of a new type of sophisticated network power transformer, a world first.  This technology has the capability to closely control network voltage and power flow and can provide a DC power supply – essential for electric vehicle charging. This has the potential to significantly increase flexibility in the electricity system and make fast electric vehicle charging a reality.

LV Engine will be delivered in collaboration with fellow electricity network operator UK Power Networks.

James Yu, SP Energy Networks Future Networks Manager said: “LV Engine will enable the continued uptake of distributed generation and electric vehicles by providing the electricity network with the intelligence and flexibility to accommodate these technologies without the need for extensive and costly network reinforcement.”

"We are collaborating with a range of partners including UK Power Networks, the network operator for London and the South East of England. It is vital that any lessons we learn are shared throughout our own business and also other network operators and that customers see the benefits as soon as possible."

Ian Cameron, Head of Innovation at UK Power Networks said: “We are delighted to partner with SP Energy Networks on this hugely innovative project which we believe will deliver considerable benefits to electricity consumers across the UK.”

Our business will also lead a separate research scheme to be trialled in the East Fife area called FUSION, which will create the UK's first intelligent local energy marketplace where energy flexibility can be bought and sold by consumers in an open and competitive market for the first time ever. It is anticipated that this project could enable potential customer savings in excess of £200m by 2050 and reduce carbon emissions by over 3m tonnes.

Jim McOmish, SP Energy Networks Head of Distribution Networks said: “Business and residential customers are seeking to maximise the efficiency and lower the cost of their energy use, and the flexibility of their demand for energy is a marketable commodity.

"At the moment there is no open accessible transparent market to buy and sell this flexibility, and the challenge is building one which unlocks that value for everybody - electricity providers on one side and consumers on the other."

Within FUSION, we are working with DNV GL, Origami Energy, PassivSystems, Imperial College London, SAC Consulting, The University of St Andrews, Fife Council and Bright Green Hydrogen.

Frank Mitchell, CEO of SP Energy Networks, said “These globally innovative projects will enable customers to be fully engaged in the electricity market, creating additional income through local generation and storage, whilst unlocking additional network capacity to make a truly nationwide network of electric vehicles a reality.

“I am delighted to secure this additional funding on behalf of our customers. These awards, which come hot on the heels of another recent Ofgem funding award to roll-out the latest network monitoring and control technology in the Dumfries & Galloway area, demonstrate our continued leadership in commercial and technical innovation together with our ongoing ambition and capability to innovate in the best interests of our customers, communities and wider stakeholders.”

“Collaboration in delivering innovation will be central to maximising value for customers. We are very pleased to be supporting UK Power Networks as a partner in its Active Response project and to have its support as a partner on our LV Engine project. We will also be working very closely with all other electricity network operators via the Energy Networks Association.”

Ofgem's electricity National Innovation Competition is an annual opportunity for electricity network companies to compete for funding for the development and demonstration of new technologies, operating and commercial arrangements.

Funding is provided for the best innovation projects which help all network operators understand what they need to do to provide environmental benefits, cost reductions and security of supply as Great Britain (GB) moves to a low carbon economy. Up to £70m a year is available through the Electricity NIC.

Ofgem announced  that LV Engine will receive £7.3m and FUSION will receive £5.3m funding for five year trial projects. This is in addition to the £8.01m of funding announced by the regulator in October for Integrated Network Constraint Management for Dumfries and Galloway which will help create a smart and flexible energy system for customers.

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