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22 | 11TH - 17TH DECEMBER 2015 | UTILITY WEEK Finance & Investment E ach year, network transmission and distribution businesses in the UK com- pete to win funds from Ofgem through the Network Innovation Competition (NIC). The competition, set up three years ago, pro- vides funding for projects designed to meet the challenges of the future in the transition to smarter grids. Ofgem has revealed the nine projects that have won a total of £62.8 million through the NIC. If these new projects follow in the footsteps of those funded by the Low Carbon Networks Fund in previous years, they have the potential not only to lay out the future for distribution and transmission in Great Britain, but also realise savings for consum- ers that could run into billions. Previous projects have investigated the potential impact of increased demand on the system through the uptake of electric vehi- cles and demand-side response. This year, however, there has been a shi to network reinforcement with a particular focus on substations, and on investigating new types of gas such as biomethane, which is forecast to provide up to 40 per cent of domestic gas in the future. Maxine Frerk, Ofgem's senior partner for distribution, said: "Investments in networks have a real potential to connect more renew- able generators, and enhance security of supply in a more cost-efficient way." Frerk said the nine winning projects show how new sources and uses of gas com- bined with smarter grids can "benefit con- sumers by making the energy system more secure and cost effective". The NIC is split into two competitions, one for electricity and one for gas. Most of the funding, £44.9 million, was awarded through the electricity NIC. These funds should help meet the challenges of intermit- tent generation on the networks, increasing impact of distributed resources and active demand, and new sources of generation connecting to the network in areas far from consumption centres. Ofgem says these challenges will "directly affect the way elec- tricity network companies plan and manage their businesses." Winning projects include £13.1 million for Scottish Power Manweb to investigate a new approach to network reinforcement by con- verting alternating current to direct current. National Grid Electricity Transmission also received £12 million to convert an existing substation into a field trial facility. But the NIC awards are not free money. The projects must demonstrate good value for customers and have robust working methods. Ofgem felt two applications for funding, one from SP Distribution and one from Western Power Distribution, did not meet these strict criteria. Ofgem said both projects lacked a "robust methodology" although they tar- geted important areas such as the role of a distribution system operator and communi- cations for smart networks. Gas distribution companies have had their future reinvigorated by the realisation that electrifying heat is not the cheap and less carbon-intensive alternative to the tra- ditional gas central heating system the gov- ernment thought it could be. The gas NIC therefore focuses on supporting projects that "meet customers' changing requirements as Great Britain moves toward a low-carbon economy", Ofgem says. Four projects requested £18.4 million in funding from a pot of £18 million. Three of Building the grid of the future Nine projects – five electrical and four gas – are sharing the £62.8 million spoils from this year's Network Innovation Competition. Lucinda Dann takes a look at the winners. Analysis GAS NIC-winning projects CLoCC, National Grid Gas Customer Low Cost Connections (CLoCC) is a project that is designed to minimise the cost – in money and time – of making connections to the National Transmission System by challenging all aspects of the pro- cess, with a particular focus on unconventional gas connections. £4.8 million BioSNG, National Grid Gas Will construct a commercial demonstration plant to produce renewable, low-carbon methane (BioSNG) by gasification of household waste. £5.4 million Real-time Networks, Scotia Gas Networks Will develop, install and demonstrate a flexible "real-time" network that would enable the GB gas network to meet current and evolving needs through sensing technologies, associated hardware and soware, and infrastructure. £7.1 million Scotia Gas Networks' innovation and new technology manager Gus McIntosh said: "A key challenge to overcome is not only to man- age the volume and flow of gas in our network, but to manage and model the energy content. Once again we're showing that the energy market gas really does have a significant role to play in the future energy mix." Partly funded City CNG, Northern Gas Networks Northern Gas Networks proposes to build the UK's first scalable city-based compressed natural gas fuelling station for back to depot city based vehicles. It will use a novel charging arrangement to recover the costs of the high pressure connection over time, and provide a proof of concept business case to enable future private sec- tor investment. £0.7 million of £1.1 million requested