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NETWORK / 24 / JULY/AUGUST 2018 INDUSTRIAL STRATEGY T he energy revolution is a commonly used phrase, but it is not oen explained well. A revolution usually means the turning upside-down of the nor - mal order of things, and there are good reasons to think we are at the beginnings of a revolu- tion in the energy world. Firstly, there are new demands on our energy systems: decarbonised, affordable energy services; elec- trification of mobility and heat, flexibility, resilience and last but not least, delivering what con- sumers want. Secondly, the rate of change of potential technical The energy revolution The government recently announced an investment of over £100 million in a new programme called 'Prospering from the Energy Revolution' as part of its Industrial Strategy Challenge Fund, delivered by UK Research & Innovation. This first article from Innovate UK aims to give an insight into this major new programme, with the intention to revisit progress over the coming months and years. solutions is rapid, increasing and unpredictable. No-one was able to predict the rapid cost reductions in solar, wind storage and electric vehicles over recent years, but other solutions such as fuel cells, micro CHP and digital platforms enabling peer- to-peer trading or intelligent automation of users' energy footprint are not far behind in nearing commerciality. This approaching subsidy-free world is a tipping point that can drive uptake of much more distrib - uted systems. In this rapidly changing landscape, there is a clear opportunity to use these new system demands to catalyse technologies and operates within a complex and regulated market is very difficult to do. Significant private investment is needed but the uncertainties of acting within a fast-changing situation are high for companies who are perhaps only operating in one small part of the system. Consumer confidence in new approaches is not easy to judge when the only thing discussed in the public debate is cost. To overcome these barriers, there is a key role for public investment to help bring together complex stakeholder groups who can work together and stimulate proof of new approaches that raise investor confidence. Unlocking investment is criti - cal to developing a sustainable landscape where replicable and scalable approaches are rolled out across the country and be - yond. Investors need to under- stand the business models that will ensure liquidity and create profitable return rates from projects. While the technology mix is important in fulfilling that business model, it is not the defining factor in a pro - gramme that aims to integrate multiple component parts; it is the services that are supplied, the revenue these generate, the capital required, and the con - tractual relationships involved. That is where the Industrial Strategy Challenge Fund, and specifically the £100m Prosper - ing from the Energy Revolution challenge come in. Whereas most innova- tion funding seeks to develop technology and then launch it to market, the Energy Revolu- tion challenge aims to start with business models that can deliver the right outcomes. These determine what services are required and in turn what tech - nical system and components are demanded. This business model-led approach will aim to develop investable propositions while providing consumers with what they actually want, rather than what a particular technol- ogy may be able to provide. Creating prosperous com- munities across the UK is one intelligent integration of a highly distributed infrastruc- ture, delivering a swathe of so- cietal benefits as a result. These dynamics underpin the energy revolution; it is underway and it is critical that the UK uses it to its benefit. While the UK has key strengths in complex system integration, 'smart' systems solutions, pockets of very interesting technologies, and world-class academia, energy revolution benefits are un - likely to be realised without some help. Putting together an intelligent, highly-distributed system which integrates new