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Ofgem Approves £57 Million for UK Smart Grid

| December 11, 2011


The Office of the Gas and Electricity Markets Energy (Ofgem) announced that six projects will share £57 million of funding to help local power networks. The money comes from Ofgem’s £500 million Low Carbon Networks Fund (LCN Fund). The projects, to be conducted in several areas across Britain, will pilot new technology and commercial arrangements.

Rachel Fletcher, Ofgem’s Acting Senior Partner for Smarter Grids, Governance and Distribution, says, “Britain’s energy grids need to undergo a revolution in how they are run so they can connect more renewable generators and a range of low carbon technologies such as ground source heat pumps. There is a significant opportunity for companies to contain the cost of this transition by making better use of existing capacity and exploring the scope to use demand side response. Lessons learnt from the projects will be shared with all network companies and other interested parties. The aim here is to ensure that the networks do not hold up the decarbonization of our energy use, and that the cost of this transition is kept as low as possible for customers.”

One of the projects involves installing electric storage batteries in homes, schools, and an office to see if customers could be encouraged to use this stored electricity at times of peak demand to reduce the load on the networks. Several projects involve better use of existing network capacity to manage congestion on the grid.

The LCN Fund was established as part of the current price control for electricity distribution network operators (DNOs), running from April 2010 to March 2015. The fund allows up to £500 million for power companies to trial new technology, operating and commercial arrangements that can facilitate the transition to a low carbon energy sector. Additionally, £64 million is available each year in the competitive element of the fund. Up to £80 million is automatically available to the DNOs over the five years of the current price control to help fund smaller scale projects.

Ofgem regulates the gas and electricity industries in Great Britain. A fact sheet giving further details about the projects that have received funding this year is available at the website.


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