Delivering smart local energy systems – UKRI

Paving the way

In today’s rapidly evolving energy landscape, innovation plays a crucial role in shaping a sustainable net zero future.

In this blog post, I will take you through the journey of a remarkable energy innovation programme delivered by Innovate UK over the past five years.

This article is for anyone interested in the huge potential of novel place-based energy systems. It will give an insight into the Prospering from the Energy Revolution challenge, how we delivered it successfully, and what we learnt.

Overcoming challenges, achieving goals

In 2018, Innovate UK and the Engineering and Engineering and Physical Sciences Research Council embarked on an ambitious journey to prove the viability of smart local energy systems. With funding of £104 million from UK Research and Innovation, the goal was clear: to demonstrate the value of intelligently integrated, place-based energy systems across power, heat and transport.

We assembled a highly constructive programme board and advisory group, an experienced and dedicated programme team and a network of resourceful stakeholders. Through these, and through a varied cohort of more than 90 innovative projects across the UK, the objective was successfully achieved.

But the journey was not without challenges. Regulatory arrangements posed barriers to implementing such systems. The technical complexities of delivering flexibility services as well as the COVID-19 pandemic caused significant disruptions. Despite these challenges and others, the teams leading the funded projects remained resilient, persevered, and developed effective strategies for successful outcomes.

Milestones and impacts

When the PFER programme funding finished on 31 March 2023, it had generated the most robust and comprehensive evidence-base available to date on smart local energy systems in the UK.

The programme demonstrated that it is possible to create smart, locally integrated energy systems that are cleaner, cost-effective, and beneficial for local citizens, businesses, organisations and communities. Projects took place across the UK, from Oxfordshire to the Orkney Islands and from Manchester to Milford Haven.

The programme also produced groundbreaking research, including PwC’s Accelerating Net Zero Delivery report which uncovered major potential benefits and savings from taking a place-based approach to decarbonisation actions.

The key achievements of the projects and learnings from the programme can be found on a recently-launched comprehensive web resource.

Insights for future innovators

The programme’s five-year journey yielded invaluable insights for both ongoing and future energy innovation work. It generated extensive knowledge about local energy systems, integrated technologies, and new market arrangements. We have also learnt a great deal about how to run big, complex, and ambitious systems programmes.

Much of this learning has come from the programme’s three large-scale demonstrator projects. These projects showed that the time for theory is over. They have reinforced the value of testing new approaches in real-world environments, in new markets and with real customers. They have fostered confidence among stakeholders and attracted further investment in local energy systems.

Innovation meets research

Another major benefit of the programme came from integrating research and innovation, in the shape of the EnergyREV consortium. This brought together academics from 22 UK universities, across multiple disciplines, to research critical questions and identify evidence to inform change.

By linking academia and application, the programme gained valuable insights into the socio-economic aspects of technology deployment. This ‘whole systems’ understanding helped projects to develop tailored solutions addressing not only technical challenges but also economic and social dimensions. The result was a comprehensive and impactful approach to place-based energy innovation.

Informing policy and regulation

Early in the programme, we realised the importance of effective feedback loops. Continuous engagement with stakeholders such as the Office of Gas and Electricity Markets and the Department of Energy Security and Net Zero helped policymakers and regulators take timely action based on programme findings. This agile approach enhanced the programme’s responsiveness to evolving needs and challenges.

One step at a time

Numerous funded projects were complex. To manage these, we found a ‘stage-gate’ approach particularly effective. Clear milestones and checkpoints helped ensure that projects remained on track and that risks and uncertainties were identified and mitigated at each stage. The process fostered transparency and accountability, instilling confidence among stakeholders and supporting the successful delivery of objectives.

The stage-gate process also enabled us to end or redirect projects that could not show they were likely to achieve their objectives. This approach, not common in publicly funded innovation programmes, helped us to maximise prudent governance, effective use of resources, and value for the taxpayer.

Defining success

From my programme management perspective, the final main learning has been the importance of defining success criteria at the outset.

Setting clear key performance indicators, expected benefits and SMART metrics (specific, measurable, achievable, relevant, and time-bound) ensured a focused approach.

The key performance indicators included metrics on cutting greenhouse gas emissions, saving money for customers, reducing infrastructure costs, and social benefits. Embedding these criteria in the business case for the programme meant we could monitor progress, measure impact, and manage resources effectively. This has been instrumental in keeping clarity and accountability and delivering successful results through our journey.

Momentum for change

The Prospering from the Energy Revolution programme showcased the transformative power of place-based energy innovation in driving sustainable change. Through real-world demonstration, it has built a body of evidence to drive action and help to build momentum for further development.

Perhaps equally importantly, it has yielded valuable learning for similar work. All the factors I have described are key takeaways that can guide ongoing and future innovation programmes.

As we look to the future, I would argue that this programme’s delivery has set a precedent for transformative change through place-based energy systems.

There is now a great opportunity for all involved in energy innovation – whether policymakers, regulators, funders, businesses or local authorities – to learn from and build on these achievements.

As part of the team delivering the programme, I feel proud of what we have accomplished, as we continue to work with business and society towards a sustainable future.

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