Has the Low Carbon Network Fund been successful at stimulating innovation in the electricity networks?

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Title: Has the Low Carbon Network Fund been successful at stimulating innovation in the electricity networks?
Authors: Rhodes, A
Item Type: Conference Paper
Abstract: The physical basis of today’s electricity networks are based on engineering design principles which have not changed substantially since World War 2. This has led to a stable, secure but intrinsically conservative electricity network system, characterised by small, incremental changes and technological advances. However, two major drivers are currently pushing a period of substantial innovation and change in the networks. The first of these is the need to incorporate increasing quantities of variable renewable generation at distribution level, as well as to prepare for increasing levels of electrification in heating and transport. The second comprises the new opportunities arising from the incorporation of ICT technology into the networks, including smart metering, smart appliances, demand-side participation and the development of new business models and services which facilitate active consumer engagement. These drivers challenge the notion of an electricity grid being a simple unidirectional series of wires and transformers and make the case for a ‘smart grid’, in which information and communication technologies (ICT) are integrated directly into the electricity networks. These advances have the potential to transform the way customers and supply companies interact with electricity, and provide significant new commercial opportunities for communications, monitoring, control and data aggregation technologies throughout the electricity system from generation through to the consumer. New network and smart grid technologies are a major focus in the UK’s low carbon innovation strategy, with substantial public funding (£81 million p.a) provided through the Ofgem-administered Low Carbon Network Fund (LCNF) and its successor the Network Innovation Competition (NIC). These are novel programmes, both in the UK and elsewhere due to their structure, which involves consortia led by network operating companies bidding for public funds. The LCNF has recently completed its five-year funding programme, making it an opportune time to evaluate the scheme’s effectiveness. This paper benchmarks, utilising systematic analysis of the European Patent Office’s PATSTAT database, the UK’s performance in smart grid patenting activity over the 2000-11 period. It then examines the LCNF, through quantitative analysis of spend patterns and semi-structured interviews with key stakeholders to assess whether the LCNF has been successful at developing and demonstrating new technologies and practices, if these technologies and practices are successfully proceeding from demonstration to deployment and if the LCNF has been open to new entrants and more radical and disruptive ideas.
Issue Date: 21-Sep-2016
Date of Acceptance: 16-May-2016
URI: http://hdl.handle.net/10044/1/40838
Copyright Statement: © The Authors
Sponsor/Funder: Engineering & Physical Science Research Council (EPSRC)
Funder's Grant Number: EP/K00154X/1
Conference Name: British Instutite of Energy Economics 2016: Innovation and Disruption: The Energy Sector in Transition
Start Date: 2016-09-21
Finish Date: 2016-09-22
Conference Place: St John's College, Oxford
Appears in Collections:Centre for Environmental Policy
Faculty of Natural Sciences

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