Funding competition Smart local energy systems: concepts and designs

UK organisations can apply for a share of up to £1.5 million to design smart local energy systems.

This competition is now closed.

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Competition sections


UK Research and Innovation will invest up to £1.5 million to fund revolutionary concept and design studies for new, smarter approaches to local energy. These approaches must aim to provide cleaner, cheaper energy services for UK consumers in the 2020s while helping make communities more prosperous and resilient.

Designs must combine new and existing energy technologies with:

  • smart systems
  • new market and regulatory solutions, such as for energy trading
  • consumer engagement

They must create scalable and replicable business models, ready for investment in the early 2020s.

The best projects will be invited to develop their ideas further in a future competition as part of the Prospering from the Energy Revolution Programme.

Funding type


Project size

Total project costs can be between £100,000 and £200,000. Projects can last a maximum of 6 months. All projects must start by January 2019, and end by July 2019.

Who can apply

To be eligible for funding you must be a UK-based:

  • business of any size
  • academic organisation or higher education institute
  • charity
  • public sector organisation or local authority
  • public sector research establishment
  • research council institute or
  • research and technology organisation (RTO)

You must:

  • carry out at least 90% of your project work in the UK
  • intend to exploit the results from or in the UK
  • work in collaboration with other businesses, research organisations, public sector or third-sector organisations
  • include at least one micro, small or medium-sized enterprise (SME)

We welcome innovative and ambitious partnerships. We particularly encourage teams that include:

  • energy network companies
  • energy suppliers, big and small
  • technology developers, including smart appliance manufacturers
  • smart system developers
  • digital systems developers, including data analytics and AI
  • design and consumer interface specialists
  • engineering service and integration businesses
  • exceptional leaders and communicators who can inform and inspire consumers and private investors

The lead organisation must claim funding through this competition. At least one other organisation in the consortium must also claim funding.

Any one business, public sector organisation or RTO may lead on one application and collaborate in a further 2 applications. If an organisation is not leading an application, they can be a collaborator in up to 3 applications.

If an RTO or public sector organisation is the lead on an application they must have at least 2 business collaborators (one SME and one other business of any size).

Projects can include partners that do not receive any funding, such as non-UK businesses, public sector organisations, industry associations or bodies involved in setting regulations, standards or codes. Their costs will count towards the total project costs but they will not count as collaborators.

If your project has total costs above £200,000, or will last more than 6 months, you must discuss your proposal with UK Research and Innovation by emailing before 1 July at the latest. Include “smart local energy system designs” in the email subject.

Successful applications will be required to share important information with Prospering from the Energy Revolution stakeholders, as described in the ‘Catapult support and information sharing’ section.


We have allocated up to £1.5 million to fund collaborative innovation projects in this competition.

This funding is part of the Prospering from the Energy Revolution Industrial Strategy Challenge Fund. It is the first stage of a programme to create detailed local energy system designs that are ready for deployment.

RTOs and public sector organisations collaborating as part of a consortium can share up to 30% of the total grant funding (including as sub-contractors). If your consortium contains more than one research organisation or public sector organisation, this maximum will be shared between them.

Your proposal

We are looking to fund a diverse portfolio of local smart energy concept and design studies. They must attract future investment and help the UK smart local energy systems industry to grow.

Your concept and design study must describe ways to improve future energy services (heat, power and mobility) in one UK location that is at least the size of a medium-sized town or equivalent.

By the early 2020s implementation of your concept or design should aim to:

  • reduce energy bills by at least 25%
  • reduce greenhouse gas emissions below fifth carbon budget (2028 to 2032) levels
  • give a world-leading consumer experience
  • produce high value local jobs and UK supply chain opportunities
  • create export opportunities for UK businesses
  • improve energy security at short and long timescales (from millisecond through to annual)
  • help make the UK resilient to technological, environmental, social, economic and wider changes
  • improve efficiency across the whole energy system
  • meet air quality targets
  • improve infrastructure productivity
  • create ways to test and scale up new technologies, business, regulatory or consumer models, speeding up industry growth

You must describe how your project will develop:

  • a thorough understanding of current and future energy supply and demand in a specific part of the UK
  • a technical and statistically robust analysis of how energy supply and demand for heat, power and mobility could be optimised locally
  • plans for integrating and testing existing assets and infrastructure with new technologies, decision-making and control systems, such as artificial intelligence, machine learning, the internet of things or autonomous systems
  • estimates, with evidence, of likely energy system costs and performance, reductions in carbon emissions, and consumer bills
  • estimates, with evidence, of likely improvements in efficiency, flexibility, local air quality, productivity, resilience and user experience
  • a detailed business plan, including as appropriate: financing, business model and regulatory approaches, and any changes needed to codes, standards or market regulations
  • details of how organisations in the energy system will share the costs, risks and benefits
  • evidence of support for the proposed designs
  • estimates for how the project will help local and national supply chains grow
  • evidence of how scalable the proposed approach is from local to national level, how suitable it will be for investment and how easily it can be replicated
  • the ability to encourage substantial private finance in future smart, local integrated energy systems in the 2020s

Project types

For feasibility studies or industrial research projects, you could get funding for your eligible project costs of:

  • up to 70% if you are a micro or small business
  • up to 60% if you are a medium-sized business
  • up to 50% if you are a large business

Find out if your business fits the EU definition of an SME.

Project we will not fund

We will not fund projects that do not meet the aims of the competition, including any that do not include heat, power and transport provision in their proposal.

Catapult support and information sharing

Projects will be funded by the Industrial Strategy Challenge Fund programme ‘Prospering from the Energy Revolution’.

The programme will be supported by an Energy Research and Integration Network. This involves the Energy Systems Catapult working with a group of leading researchers, and government and independent regulatory bodies.

It aims to make sure all projects:

  • prepare designs using the best practices and tools available
  • understand their role in the national system
  • share what they learn so it can create the greatest possible benefit for businesses, regulators, investors, consumers, researchers and policy-makers

Your proposal must include plans to share your project’s main data sets with the network. If you are successful you will be required to sign non-disclosure agreements with the Energy Systems Catapult, other network members and the organisations contracted to manage the programme evaluation.

The Energy Systems Catapult, as a member of the network, will support projects with:

  • project co-ordination
  • local area energy system modelling
  • initial design assessment and advice
  • analysis and synthesis
  • evaluation frameworks
  • learning library and dissemination

Where appropriate the Energy Systems Catapult will also provide:

  • a whole systems perspective
  • independent energy system expertise and analysis
  • advice on energy markets and governance
  • advice on testing and demonstration
  • advice on consumer engagement and business model development
  • project data analysis
  • domain expertise

A range of additional services could be built into your project in co-ordination with the Catapult. For further information, and to access help from the Energy Research and Integration Service, you must email the Energy Systems Catapult at by 18 June 2018.

The network will recruit experts from the research community during the bid period. UK Research and Innovation will announce the support available.

8 May 2018
Competition opens
15 May 2018
Briefing event recording.
25 July 2018 12:00pm
Competition closes
12 October 2018 3:11pm
Applicants notified

Before you start

Please read the general guidance for applicants. It will help your chances of submitting a quality application.

When you start an application you will be prompted to create an account as the lead applicant or sign in as a representative of your organisation. You will need an account to track the progress of your application.

As the lead applicant you will be responsible for:

  • collecting the information for your application
  • representing your organisation in leading the project if your application is successful

You will be able to invite:

  • colleagues to contribute to the application
  • other organisations to collaborate in the project if your application is successful

Collaborating organisations can be other businesses, research organisations, public sector organisations or charities.

What we will ask you

The application is split into 3 sections:

  1. Project details
  2. Application questions
  3. Finances

1. Project details

Explain your project. This section is not scored, but we will use it to decide whether the project fits with the scope of the competition. If it doesn’t, it will be immediately rejected.

Application details

The lead applicant must complete this section. Give your project’s title, start date and length. List any organisations you have named as collaborators.

Project summary

Describe your project briefly, and be clear about what makes it innovative. We use this section to assign experts to assess your application.

Public description

Describe your project in detail, and in a way that you are happy to see published. Please do not include any commercially sensitive information. If we award your project funding, we will publish this description. This could happen before you start your project.

Project scope

Describe how your project fits the scope of the competition. If your project is not in scope it will not be eligible for funding.

2. Application questions

In this section, answers to these questions are scored by the assessors. Following assessment, you will receive feedback from the assessors for each question.

Your answer to each question can be up to 600 words long. Please make sure that the font used for all appendices is legible and large enough to be read on a normal 100% zoom.

Question 1: Project description

Please provide details of the project, its outputs, and the main inputs, activities and deliverables linked to these outputs.

Describe the scale, approach and scope of the project. Give:

  • the location, numbers or types of users
  • the diversity of energy supplies and networks involved

Outline the role of the new technologies, business and/or regulatory models, and the reasons why these are suitable for your chosen approach and location. Identify the options for learning and rapid feedback between the project and the wider market.

Explain how much appetite there is within your chosen locality, and from the wider private sector, to contribute inputs (such as data, infrastructure, funding or experience from other sectors) to the project. Describe any local work that has either built capability, or contributes directly to the project in another way.


  • the challenges and requirements and how your methodology addresses them
  • the main innovations that will be adopted or trialled

You can submit a single appendix as a PDF no larger than 1MB and up to 5 pages long to support your answer. You can include images, maps and tables.

Question 2: Project structure


  • the work packages and main tasks of the project
  • who will lead each work package
  • the costs, milestones and deliverables you expect
  • your approach to project management, including which tools and mechanisms you will use
  • your project plan in enough detail to identify stage gates or milestones, any links or dependencies between work packages or other projects, and how these will be managed
  • how project partners will manage internal and external stakeholders
  • how monitoring and evaluation will be built into the project

You can submit a single appendix as a PDF no larger than 1MB and up to 5 pages long to support your answer. You can include images, maps and tables.

Question 3: Business growth

How will your proposal drive the growth of a UK smart local energy systems industry?

Provide evidence for:

  • the level of private sector and other funding available to fund future development
  • any opportunities for local and UK-wide smart local energy systems industry and wider supply chain growth
  • how this project will create opportunities to research, test and support the evolution of technologies, standards, codes, business or regulatory models
  • how easy it would be to repeat the project or expand it to other parts of the UK
  • any potential for future commercial exploitation, both domestic and international, by project partners, and define your target markets
  • any opportunities you expect to improve technology and market readiness
  • any opportunities for UK business growth

Please estimate inward investment and export opportunities.

Question 4: Improving user experience

How will your proposal improve the experience of a range of users of the energy system?


  • how you will contact and work with stakeholders through the course of this project, including use of best practices where possible
  • how consumer bills will be affected
  • which user groups and interactions you will target
  • how their experience will change

Describe what information you have about the user experience, how reliable it is and how insight will be developed through the project.

Question 5: Energy system benefits

How will your proposal improve the energy system? By how much? Who will benefit?


  • how this approach will reduce energy system costs, increase productivity and competitiveness, and reduce fuel poverty, locally and nationally
  • how your project will result in improvements to the environment, for example in greenhouse gas emissions, air quality or other aspects of the natural or built environment
  • to what extent this project could accelerate national progress to meeting the UK’s fifth carbon budget and air quality targets
  • how the proposal will increase energy security and resilience to technological, societal and environmental changes, including cybersecurity challenges and climate change

Please quantify and justify any local and national targets in:

  • total energy system costs
  • investment costs
  • operating costs
  • financing costs
  • infrastructure productivity
  • competitiveness
  • energy security
  • fuel poverty
  • greenhouse gases and other emissions
  • other impacts where possible

Justify any estimates, timescales, assumptions or interdependencies. Indicate how you will overcome any limitations or uncertainties on data availability and reliability.

Question 6: Innovation

How is your proposal revolutionary?

Describe the innovations in your proposal, including for example:

  • new energy technologies, such as storage, local generation, efficiency measures, vehicle to grid, micro combined heat and power and multi-vector approaches
  • new smart systems, such as internet of things (IoT) connectivity, novel sensor solutions, smart controls and automation, and data analytics
  • new market systems, such as blockchain, peer to peer and aggregation systems for highly dispersed assets
  • new societal engagement tools, such as gamification, voice control and integration with users preferred technology interfaces
  • regulatory approaches, such as ones that can unlock system liquidity and maintain consumer protection
  • how your proposal will enable more competitive energy markets in the future
  • the information that you are able to generate and share with the wider Prospering from the Energy Revolution programme

Question 7: Team and resources

Who is in the project team and what are their roles?

You should describe or explain:

  • the roles required for developing the design study alongside the skills and experience of the team
  • the resources, equipment and facilities needed for the project, and how and when you will use them
  • the details of any vital external parties you will need to work with, including sub-contractors
  • the current relationships between project partners and how these will change as a result of the project
  • what management reporting lines you will use
  • the track record the team has of working together to respond efficiently and effectively to the challenges of a high-profile and fast-paced multi-disciplinary project
  • the risks and timescales for critical resources
  • any gaps in the team that will need to be filled

You can submit a single appendix as a PDF no larger than 1MB and up to 5 pages long to support your answer, including simplified CVs of the main personnel. You can include diagrams or tables.

Question 8: Risks

What are the main risks for this project, and how are you going to manage them?

Include a detailed risk register covering the main assumptions, risks and issues involved in delivering your project and follow-on activities.

Explain or describe:

  • the probability, severity, timing and uncertainty of the main risks
  • which stakeholders will be impacted by the risks
  • how assumptions and risks will be managed, monitored and mitigated, giving details of contingency plans
  • how the risk register will be monitored and updated throughout the project

Some of the risks you should consider are:

  • project inputs, including approvals, procurement, recruitment, installation, commissioning, obtaining matched funding, recruitment of participants or consumers and the availability of equipment and resources such as personal data
  • project outputs to achieve the desired scale and quality in the target location, including how easy it is to repeat and scale, and your expectations for follow-on private sector investment
  • wider economic, environmental and societal impacts not being achieved
  • how the project will ensure maximum value and minimum liabilities once public funding ceases

Please also describe whether and how stakeholders’ attitudes are currently aligned with the project, and how this might affect your risks. Indicate the project critical path against your project plan and the risks associated with it.

You should also detail risks that will need to be managed by the government, UK Research and Innovation or other stakeholders outside of the project partnership.

You can submit a single appendix as a PDF no larger than 1MB and up to 5 pages long to support your answer. Risk registers, diagrams or tables are welcome.

Question 9: Added value of public funding

Describe the impact that an injection of public funding would have on this project.

Describe or explain:

  • if this project could go ahead in any form without public funding and if so, the difference the public funding would make, such as enabling an acceleration of products and services to market, more partners, or reducing risk
  • the likely impact of the project on the business of the partners involved
  • why you are not able to wholly fund the project from your own resources or other forms of private-sector funding, and what would happen if the application is unsuccessful
  • how this project would change the nature, amount and timing of activity the partners would undertake (including R&D), and the related spend

Question 10: Costs and value for money

How much will the project cost and how does it represent value for money for the team and the taxpayer?

Describe or explain:

  • the total project cost and the grant being requested in terms of the project goals
  • how the partners will finance their contributions to the project
  • any additional public funding
  • any uncertainties and contingencies in costs, and how these will be managed
  • how this project represents value for money for you and the taxpayer, and how it compares to what you would spend your money on otherwise
  • the distribution of costs and grant across the project partners
  • any sub-contractor costs and why they are critical to the project

3. Finances

The finances section asks each organisation in your project to complete their own project costs, organisational details and funding details. Academics will need to complete and upload a Je-S form. For full details on what costs you can claim please see our project costs guidance.

Background and further information

Prospering from the Energy Revolution fund

The Prospering from the Energy Revolution (PFER) Industrial Strategy Challenge Fund (ISCF) was announced in the government’s Industrial Strategy. PFER ISCF aims to prove by 2022 that new, smarter, local energy approaches can deliver cleaner, cheaper energy services. They can do this by integrating new technologies, smart systems, market solutions and consumer engagement into business models that are investable in the long term. This will lead to more prosperous and resilient communities, and a more efficient energy system.

The world is embarking on a $2 trillion a year energy revolution that will transform the way energy is delivered and used. This is driven by the need to decarbonise, and new opportunities from cheap, clean technologies such as renewables and storage, as described by the International Energy Agency. These technologies are connecting with emerging digital enablers such as artificial intelligence (AI), big data, internet of things (IoT) sensing and machine learning. This creates an opportunity for smart systems to revolutionise energy delivery, putting the consumer’s needs at the heart of the system.

These smart systems promise to intelligently link supply, storage and demand patterns across power, heating and transport. This results in a dynamic energy system that can dramatically improve efficiency, resilience, and service to consumers and the wider system, as captured in the Future Power System Architecture (FPSA) project.

Currently innovations happen in isolation, and the market and regulation are structured in silos of electricity, gas (heat) and transport. This setup is unlikely to produce the hoped-for benefits, and can result in overinvestment in incompatible systems, more expensive services, imported, niche and less resilient solutions, and a continuing uncompetitive market.

We aim to piece together the future UK energy system to maximise socio-economic and environmental benefits, as set out in the Royal Academy of Engineering report to the Council of Science and Technology. This can create sustainable advantage for the UK through new products and services, and joined-up expertise.

The challenge is to develop and prove new ways of combining distributed energy technologies with new market arrangements. These should deliver business models that are focused on end users’ needs and also scalable, resilient for the long term and suitable for investment. Without government intervention to get organisations talking to one another, the highly complex market is likely to continue to produce fragmented solutions. These combine into expensive systems that do not give the consumer what they want and decarbonise slowly.

Recent evidence has suggested smart local energy system designs are an important missing link. They can encourage development and prove the benefits of locally integrated systems. This competition seeks to fill that gap.

Extra help

If you want help to find a project collaborator, contact the Knowledge Transfer Network.

If you need more information, call the competition helpline on 0300 321 4357 or email us at

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