When setting our strategic innovation challenges, Innovate UK and Ofgem engage with subject matter experts from:
- third party innovators
- the regulator
- academia
- network companies
- policymakers
- industry
This gives us a robust, transparent, and well-informed process for challenge identification and prioritisation.
Feedback from stakeholders this year was that direction setting should be more specific and longer term. Therefore, Innovate UK and Ofgem are setting seven specific challenges for the next two years, moving away from annual challenge setting.
Challenge setting
The challenge setting process is used to share knowledge, build evidence and consensus across the energy system around the most pressing innovation needs. This sets clear market direction for projects to deliver transformational innovations that support the decarbonisation of our energy system.
The resulting challenges help shape the future energy network innovation landscape, driving environmental, economic, societal and whole-system benefits.
The challenges
By considering the broader policy priorities and regulatory landscape alongside pressing technical and commercial challenges, we identified where the Strategic Innovation Fund (SIF) can bring true additionality, unlocking ideas that might not otherwise progress.
The challenges identified for round five are as follows.
Advanced energy transmission and networks
How can we leverage breakthroughs in semiconductor, superconductor and wireless power transmission technologies to enhance grid performance?
Dynamic modelling
How can we leverage advanced grid simulation and optimisation to ‘squeeze more capacity’ from existing electricity networks?
High-energy demand point integration
How can we develop scalable approaches to integrate the rise of large demands, for example data centres, ensuring an increase in capacity within the next decade?
Consumer centric grid solutions:
How can we use novel technology and processes to deliver grid expansion in ways that enhance public support and deliver wider local and environmental benefits?
Enhanced system visibility and control
How can we integrate digital automation and enhanced system monitoring to support next generation power system control and operations?
Green gas
How can we integrate low carbon gases such as biomethane and Bio-SNG in a cost-effective way, enabling networks to efficiently manage their injection while ensuring system stability and reliability?
Whole system optimisation
How can whole system approaches enable gas and multi-vector decarbonisation?
These seven challenges reflect the most urgent opportunities for innovation, where targeted investment can drive meaningful transformation across the whole of the energy system.
Challenges for all rounds are described in full within publications that can be found on the Ofgem SIF webpage.
Ideation
The next step in the SIF process is for Innovate UK to engage with a wide range of energy and non-energy sector innovators on the SIF round five challenges.
Innovate UK will be running a series of technical webinars and ideation workshops, both in-person and online. These will help innovators learn more about the problems networks face, and networks learn more about the problems customers face, to enable discussion of potential solutions.
Technical webinars will set the scene on specific problem areas, explore network and consumer needs and outline the current innovation landscape.
Ideation workshops will then bring together key stakeholders to generate and refine new ideas for projects that will target these specific problem areas.
After each of the workshops there will be follow-up engagement to forge partnerships, exchange knowledge and develop an application for funding.
Centring innovation
Marzia Zafar, Deputy Director of Digitalisation and Innovation at Ofgem, said:
Innovation must be central in our efforts to achieve clean power by 2030 and net zero by 2050. The challenges Ofgem has set out, which range from wireless electricity transmission, to using technology to ensure grid changes are consumer focused, will drive the kind of thinking required to transform our energy system for the better.
As a regulator dedicated to growth and innovation as well as consumer protection, we’re excited to see how applicants propose to meet these challenges, which have been designed to reduce carbon emissions and consumer bills.
Transformational projects
Jodie Giles, Deputy Director of Ofgem SIF at Innovate UK, said:
Thank you to everyone who engaged with challenge setting this year to help us identify where SIF can bring true additionality in line with Ofgem’s strategic direction. Challenge setting is just the start, and we look forward to working with diverse organisations across the energy system and beyond.
Our aim is to develop high quality and transformational projects that accelerate delivery of net zero, at lowest cost to the customers who use and pay for the energy networks. These final seven challenges reflect the most urgent opportunities for energy network innovation, where targeted investment can drive real transformation across the energy system.
In a departure from setting these challenges annually, we’ve set more specific challenges for the next two years to give clear and longer-term direction.
Funding opportunities
The next cycle of SIF funding competitions open on Monday 26 May 2025.
To apply for round three innovation challenges you must be in beta stage.
To apply for round four innovation challenges, you can be in discovery, alpha or beta.
To apply for round five innovation challenges, you can be in discovery, alpha or beta.
For more information on technical webinars, ideation workshops and funding competitions, visit the Ofgem SIF programme page on the Innovate UK Business Connect website.
