Network

W hile attention has been focused on the review of the innova- tion mechanism, net- work companies have continued quietly to vie for the funds up for grabs every year. In early December, Ofgem revealed the six successful projects from this year's Network innovation Competition (NIC). Projects that will shape the future of the sector. It also identified projects that were found wanting. Compared with projects previously funded through the NIC, this year's success- ful entries have a strong focus on issues of the here and now, particularly the transition to distribution system operator, new sources for ancillary services and distributed gen- eration – or simply exploring the practical implications of adopting technologies of the future of today's network. In the electricity competition, three pro- jects are set to explore different elements of the transition to DSO, and two of them are being conducted by transmission operators. One also has a heavy focus on community interaction, which would bring fresh per- spective to the subject. One project is practical in nature, and will consider developments in electronics technology and help establish clear links between its potential implementation and the opening up of opportunities for decarbonised heat generation in urban areas. On the gas side, both of the projects submitted were approved. They will consider the implications of adopting new kinds of gas using practical tests, and the impact this will have on administrative mechanisms such as billing. But not all the projects made the cut. Two were rejected, although it was acknowledged that both were tackling critical issues. WPD's Proteus was considered to be too future-gazing in nature, and would achieve a solution that would likely be superseded. Inspire was deemed to be using funds to undertake innovation that should be carried out as part of "business as usual", and it would be unlikely to be adopted by other network companies (see details on project Proteus and Inspire overleaf ). The expert panel that helps Ofgem access the quality of the projects expressed some concerns, namely disappointment about the small number of gas projects submitted, and a recurring theme of the opportunity for third parties to benefit significantly from customers' money. In future it would like to see more transparency around the profits likely to NETWORK / 36 / DECEMBER 2016/JANUARY 2017 INNOVATION FUNDING be made by such companies. With plans afoot to allow third parties to access funds directly, Ofgem may have to define more stringent rules to ensure this does not result in profiteering. With this round over and the future secure, networks will soon likely to be considering next year's entries. Ofgem has expressed a desire for clearer evidence that there is an appetite among other network operators to adopt the chosen solution, and more transparency about the likely profits and contributions of third parties. Electricity NIC Phoenix £15.6m – no conditions Other funding – £4m Scottish Power Transmission (SPT) Project overview Phoenix will trial a new method of providing ancillary services through a novel combina- tion of compensation equipment. Ancillary services include frequency regulation and voltage control to the transmission system operator. These services are traditionally provided by large thermal generators. The project will also test how these ser- vices can be offered commercially, and investigate the associated agreements that will have to be put in place for this to become a business-as-usual option across the network. Ofgem's assessment Ofgem considers the project timely because the problems it is addressing will be exacerbated in future as more fossil- fuelled generation goes offline. Phoenix's initial analysis suggested about 20 units would be needed across the GB network. By demonstrating the feasibility of the technology, the project would enable industry to assess whether this is the best solution in each case. This project was deemed expensive, but value for money when considered against the current alternative methods of providing ancillary services and the scale of the potential benefits. SPT has also secured £4 million of in-kind funding from each of its non-network project partners. The project will involve four partners: ABB, NGET, the University of Strathclyde and the Technical University of Denmark. The expert panel was concerned that ABB would unduly benefit from the project considering its contribution if the project comes to a successful outcome, but was satisfied that a rigorous procurement process had been Electricity NIC l    £81m total funding available l    £46.8m funding requested l    £33m funding awarded l    6 projects submitted l    4 projects approved l    £8.1m combined funding to be provided by DNOs and project partners N I C 2 0 1 6 I N N u m b e r s £15.6 £8.0 £4.9 £4.6 £7.8 £6.8 £4.8 £6.0 Gas NIC l    £18m total funding available l    £11.6m funding requested and awarded l    2 projects submitted and approved l    £1.3m to be provided by GDNs Phoenix Scottish Power Transmission Transmission and Distribution Interface (TDI) 2.0 National Grid Electricity Transmission OpenLV Western Power Distribution PowerFuL-CB UK Power Networks Proteus Western Power Distribution Inspire Scottish Power Distribution HyDeploy National Grid Gas Distribution Future Billing Methodology National Grid Gas Distribution £11.6m £46.8m

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