Funding competition IETF deployment of energy efficiency technologies in industry

Organisations can apply for a share of up to £30 million for grants for energy efficiency projects that reduce fuel bills and carbon emissions.

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Competition sections

Description

This Industrial Energy Transformation Fund (IETF) competition is offering up to £30 million, split across 2 strands, to fund feasibility, engineering studies and deployment. In this strand projects must deploy technologies to improve the energy efficiency of industrial processes.

In this strand, industrial businesses of any size can apply, either on their own or in collaboration with other organisations. The lead applicant must operate at an eligible site in England, Wales or Northern Ireland at which the project is carried out.

The other competition strand, IETF industrial energy efficiency and decarbonisation studies, will support feasibility and engineering studies to develop energy efficiency and deep decarbonisation projects that enable possible subsequent deployment.

The IETF is a Department for Business, Energy and Industrial Strategy (BEIS) fund. Innovate UK is delivering this competition on behalf of BEIS, which is a joint sponsor. We will be sharing all data on your application and project with BEIS. BEIS may contact you to gather IETF evaluation information irrespective of whether your application is successful.

The competition closes at 11am UK time on the deadline stated.

BEIS and Innovate UK will keep under review the impact of the current global disruption on applications to the competition.

Funding type

Grant

Project size

The minimum grant companies of any size can receive is £250,000.

Who can apply

State aid

Any business registered in England, Wales or Northern Ireland claiming grant funding must be eligible to receive state aid at the time we confirm you will be awarded funding. It is not possible to award grant funding to organisations meeting the condition known as undertakings in difficulty. If you are unsure please take legal advice.

You must read and follow the guidance on article 38 for this competition, including how much funding you can claim.

Your project

Your project must:

  • start by 1 April 2022
  • end by 31 March 2024
  • have a minimum total grant funding of £250,000

At the end of your project you must have installed and begun to operate (or be ready to operate) the energy efficiency technology.

If you are requesting a grant that exceeds £3 million, you must inform Innovate UK before submitting an application. This must be by email to support@innovateuk.ukri.org at least 15 working days before the competition closes. Include the technology your project is focusing on and the total grant you expect to apply for.

Your project work must be carried out at a single manufacturing site or data centre in England, Wales or Northern Ireland. You may include multiple projects within your application, provided they are located at the same site, If you would like to run a similar project at additional sites you will need to submit one application for each site. A site is defined as the postcode, or multiple directly adjoining postcodes as relevant, at which the project takes place.

You must consent to produce a case study for knowledge sharing during your project. It will be made publicly available so should not include any commercially sensitive information.

Lead organisation

To lead a project or work alone your organisation:

  • must be a business of any size registered in England, Wales or Northern Ireland
  • must operate at the manufacturing site or data centre in England, Wales or Northern Ireland where the project is carried out
  • can collaborate with other businesses, research organisations, research and technology organisations (RTO), academic institution or public sector organisations which must all be registered in England, Wales or Northern Ireland
  • must carry out its project work in England, Wales or Northern Ireland
  • cannot be an undertaking in difficulty (see section on state aid)

Find out which definition your organisation falls into.

Academic institutions cannot lead or work alone.

This competition is aimed at specific types of business. These are determined by a code allocated at the time of registering at Companies House, called a standard industrial classification (SIC) code.
You will need to check your business SIC code to make sure you are eligible. For this competition your business must operate at one of these sites:

  • manufacturing 10 - 33 or
  • data centres 63110

A third party (for example, a consultancy or an energy service company) can prepare an application on behalf of the lead applicant. However, Innovate UK will not have a legal relationship with or pay money to a third party.

(Text edit 31 July 2020: we have changed the word ‘be’ to ‘operate at’ and 'sites' for clarity.)

Project team

To collaborate with the lead your organisation must:

  • be a business of any size, a research organisation, a research and technology organisation (RTO), an academic institution or a public sector organisation
  • be registered in England, Wales or Northern Ireland
  • carry out its project work in England, Wales or Northern Ireland

The lead must claim funding by entering their costs during the application. If the lead is collaborating with other organisations then the lead and at least one other partner must claim grant funding and enter their costs into the Innovation Funding Service.

Each partner organisation must be invited into the Innovation Funding Service by the lead to collaborate on a project. Partners must enter their own project costs into the Innovation Funding Service.

Your project can include partners that do not receive any of this competition’s funding, for example non-UK businesses. Their costs will count towards the total eligible project costs.

Subcontractors

Subcontractors are allowed in this competition and can be from anywhere in the world. We would expect subcontractor costs to be justified and appropriate to the total eligible project costs.

You must make sure they are sufficiently qualified for their role.

Resubmissions

You can use a resubmission to apply for this competition.

Funding

We have allocated up to £30 million to fund projects in this competition across 2 competition strands:

The majority of the funding will be used in this strand.

This competition provides state aid funding under article 38, ‘Environmental Investment aid for energy efficiency measures’, of the General Block Exemption Regulation (GBER). It is your responsibility to make sure that your organisation is eligible to receive state aid. You must not claim funding from any other state aid source for this project if this would result in the aid amount permitted by the GBER being exceeded.

If your organisation’s work on the project is mostly commercial or economic, your funding request must not exceed the limits below. These limits apply even if your organisation normally acts non-economically.

Under Article 38 the maximum funding that your organisation can claim is €15 million for each project that it is involved with. The currency conversion for this limitation will happen at the point of grant award.

An organisation can fund multiple projects if it is able to show that each project is a separate investment. If funding has already been granted to an individual project, then the maximum funding that the project can receive is €15 million minus the amount already received.

You cannot apply for, or obtain, duplicate funding in respect of the funded activities covered by the grant. Duplicate funding means funding provided by another source for the same activity. Any match or pooled funding, where declared, will not be duplicate funding.

You cannot claim for the costs of operating your installed energy efficiency technology. You can only claim funding in this competition for projects that take the energy efficiency of your site beyond the relevant legal minimum standards.

The eligible costs of your project are the extra investment costs necessary to achieve the higher level of energy efficiency. You can read more about Article 38, including maximum funding, undertakings in difficulty, company size definitions, assisted areas, and eligible costs.

Research organisations

Any research organisations in your project team undertaking non-economic activity as part of the project can share up to 30% of the total eligible costs. If your project team contains more than one research organisation undertaking non-economic activity, this maximum is shared between them.

Assisted areas

Under state aid rules the government can, in certain circumstances, offer additional financial support to organisations acting economically, if they are conducting projects located in specific geographical areas. These are known as ‘assisted areas’.

If your project is located in assisted area A you could receive funding for your eligible project costs of:

  • up to 65% if you are a micro or small organisation
  • up to 55% if you are a medium-sized organisation
  • up to 45% if you are a large organisation

If your project is located in assisted area C you could receive funding for your eligible project costs of:

  • up to 55% if you are a micro or small organisation
  • up to 45% if you are a medium-sized organisation
  • up to 35% if you are a large organisation

If your project is located in another area you could receive funding for your eligible project costs of:

  • up to 50% if you are a micro or small organisation
  • up to 40% if you are a medium-sized organisation
  • up to 30% if you are a large organisation

Read the definitions of different organisation sizes.

Your proposal

This strand of the competition will provide grants to improve the energy efficiency of industrial processes.

Your project must focus on deployment of technology that has been proven to work through successful operations and/or is qualified through test and demonstration. The technology must improve the energy efficiency of an industrial process or processes. Your project must only be possible because of this funding.

Example technologies include:

  • improved process control
  • more efficient heat exchange
  • more efficient drying
  • energy recovery from waste heat
  • energy recovery from waste pressure
  • resource process optimisation

You must follow the specific technical requirements.

Portfolio approach

We are looking to fund a portfolio of projects.

The ‘portfolio approach’ is intended to make sure the IETF has a diverse set of projects balanced across the following variables:

  • geographical areas
  • technologies
  • industrial sectors
  • organisation types
  • project sizes

Monitoring, evaluation and knowledge sharing

You will be required to submit data throughout the project and for 5 years after the end of the project. IETF will use this to evaluate whether your project has achieved the benefits described in your proposal and has contributed to the overall objectives of the fund.

This information may be used to create and maintain a register of grant recipients and publishable project case studies. BEIS or Innovate UK may publish aggregated statistics on the benefits of the IETF.

If you are successful you will need to submit a detailed monitoring and verification plan that will be approved by Innovate UK. This will expand on the outline plan captured in question 7.

Projects we will not fund

We are not funding:

  • technologies that are not proven to work through successful operations and/or are not qualified through test and demonstration
  • repair and maintenance projects that would be undertaken in the normal course of business
  • plant closure projects
  • energy efficiency measures in transport, lighting, or building heating and cooling
  • electricity generation, such as solar, wind, combined heat and power

14 July 2020
Online briefing event: Register now
20 July 2020
Online briefing event: Register now
20 July 2020
Competition opens
28 October 2020 11:00am
Competition closes
27 January 2021
Applicants notified

Before you start

You must read the guidance on technological scope and State aid Article 38.

Innovate UK is unable to award grant funding to organisations meeting the condition known as undertakings in difficulty.

We recommend that you request an eligibility screening assessment as early as possible to gain an opinion on your likely eligibility for the competition. You can request an eligibility screening assessment by emailing Innovate UK at support@innovateuk.ukri.org.

When applying, you will need to complete and upload the project benefit calculator form to help capture energy savings calculations and other benefits as part of question 6.

What we will ask you

The application is split into 3 sections:

  1. Project details.
  2. Application questions (including the project benefit calculator).
  3. Finances.

1. Project details

This section sets the scene for the assessors and is not scored. However, some aspects will be used to determine if your project is eligible and in scope.

Application team

Decide which organisations will work with you on the project. Invite people from those organisations to help complete the application.

Application details

The lead applicant must complete this section. Give your project’s title, start date and duration.

Public description

Describe your project in detail, and in a way that you are happy to see published. 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.

Your answer can be up to 400 words long.

Eligibility and scope

Please provide the following details to help us assess your eligibility:

  1. Your company’s standard industrial classification (SIC) code.
  2. Full address of the project investment site.
  3. Full address of your headquarters (if different from your company’s registered address).

Describe how your project fits the scope of the competition. We will use this to assign experts to assess your application.

Please include how your proposed technology has either been proven to work through successful operation or is qualified through test and demonstration.

Please confirm that the project would not have gone ahead in its current form without IETF funding. If your project would have gone ahead without this funding, it will be ineligible and will not be assessed.

If your project is not eligible and in scope, it will be rejected and will not be sent for assessment. We will give you feedback on why.

Your answer can be up to 400 words long.

Additional information

This information may be used for monitoring and evaluation. Tell us:

Your answer can be up to 200 words long.

2. Application questions

Answers to these questions will be scored by the assessors. You will need to pass a minimum threshold for all questions except question 7. Written feedback will be provided.

Applications are assessed by up to 5 assessors. The assessors are experts from business, academia and/or the public sector. Applications are assessed against the same set of scoring criteria. All applications are assessed on individual merit.

After assessment, a proposed list of projects for funding will be reviewed by both BEIS-led and Innovate UK-led panels. The panels will submit a list of recommendations to BEIS ministers for a final decision. The decision will be based on your assessment score and the portfolio approach. It is possible that an application that received lower assessors’ scores may be recommended for funding over others in order to achieve a more balanced project portfolio.

Do not include any website addresses (URLs) in your answers.

Question 1. Project overview and technical feasibility

What is the technical solution to the energy efficiency gap that has been identified? Describe or explain:

  • the main motivation for the project
  • the approach you intend to take and the technological solution that you intend to deploy
  • the nature of the outputs you expect from the project, including the projected benefits (for example carbon savings) and additional benefits from carrying out the project (for example streamlining an industrial process) – detailed benefit calculations will be captured in question 6
  • how the project is scalable and could be replicated by others in the sector or other sectors
  • how the solution or solutions are aligned with the government’s commitment to reach net zero by 2050

Your answer can be up to 600 words long. The question is worth 15 marks.

You can submit one appendix of any diagrams or technical drawings to support your answer. It must be PDF and can be up to 2 A4 pages long. The font must be legible at 100% zoom.

Question 2: Deliverability

Which organisations are in the project team and what are their roles? How will you manage the project effectively and what are the key project delivery milestones?

Describe and explain:

  • any project dependencies, lead-in times or decision-making timescales
  • the project team structure, including the roles, skills and experience of key members and personnel
  • the resources, equipment and facilities needed for the project and how you will access them
  • the details of any key external parties, including sub-contractors, who you will need to work with to successfully carry out the project
  • the main work packages of the project, indicating the lead partner assigned to each and the total cost of each one
  • your approach to project management, identifying any major tools and mechanisms you will use to get a successful project outcome

Your answer can be up to 400 words long. This question is worth 5 marks.

You can submit, as an appendix, to support your answer a project plan or Gantt chart. It must be a PDF and can be up to 1 A4 page long. The font must be legible at 100% zoom.

Question 3: Risk assessment

What are the main risks for this project and what actions have been or will be taken to mitigate them?

Describe and explain:

  • the main risks and uncertainties of the project, including the technical, commercial, managerial and environmental risks
  • how you will mitigate these risks
  • the structures and processes in place to own and manage the risks identified
  • any project inputs that are critical to completion, such as resources, expertise, data sets
  • any output likely to be subject to regulatory requirements, certification, ethical issues and so on, and how you will manage this

Your answer can be up to 400 words long. This question is worth 5 marks.

Question 4: Project costs

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

(Text edit 31 July 2020: we added the word 'for' to clarify)

In terms of the project goals, describe or explain:

  • the total eligible project costs and the grant you are requesting
  • how you have ensured good value for money for the taxpayer by obtaining the best cost for the project (for example through competitive tenders)
  • how firm the costs are (for example whether they are quotes or tenders)
  • how budgets will be managed
  • how you have worked out the minimum IETF grant required to enable the project to go ahead
  • any sub-contractor costs and why they are critical to the project

Your answer can be up to 400 words long. This question is worth 10 marks.

Question 5: Added value

What impact would public funding have on the organisations involved? Include:

  • what would have happened without IETF funding
  • why you are not able to wholly fund the project from your own resources or other forms of private-sector funding (such as loans)
  • the likely impact of the project on the businesses of the collaborators involved
  • how this project goes above and beyond your existing energy-and carbon reduction commitments (such as climate change agreements)

Your answer can be up to 600 words long. This question is worth 15 marks.

Question 6: Project benefits

Download and complete the project benefit calculator. This calculator will capture information on the projected savings from the energy efficiency improvement. Upload the completed document as an appendix to this question.

Describe or explain:

  • what makes your project cost effective
  • the reductions you envisage on fuel bills and greenhouse gas emissions
  • how you derived the baseline energy consumption (in MWh), including any assumption or data sources
  • how you derived the energy consumption (in MWh) after the energy efficiency measure has taken place, including any assumptions or data sources
  • how you derived the cost of energy (in £/MWh)
  • how you derived the project lifespan (in years)
Also include:

  • written supporting evidence for your data
  • written assumptions made in the calculation
  • a written description of the methodologies used in your calculator inputs

Your answer can be up to 800 words long.

The cost-effectiveness is calculated by the project benefit calculator, which you must upload as an attachment to this question. Your text answer will be used to assess the credibility of your inputs into the project benefit calculator.

This question is worth 45 marks and scores will be assigned on a competitive ranking based on the cost-effectiveness of the projects in terms of reducing fuel bills (15 marks) and greenhouse gas emissions (30 marks). The credibility of the figures you provide and quality of supporting evidence will affect your score.

Question 7: Measurement and verification

Provide an outline measurement and verification plan for how you will monitor actual energy savings from the project.

Please describe and explain the following:

  • how you plan to monitor all the benefits from your project, including the measurement of energy, carbon and fuel bill savings
  • the methodologies you will use to verify the savings from the project, which might include: metering direct fuel consumption, analysis of fuel bills and measurement of routine adjustments (such as production volume)
  • who will be responsible for measuring and verifying the savings

This information will used as a baseline for your detailed measurement and verification plan if you are successful.

Your answer can be up to 400 words long. This question is worth 5 marks.

3. Finances

Each organisation in your project must complete their own project costs, organisational details and funding details. For full details on the costs you can claim please see our project costs guidance.

Background and further information

Further support

If you need more information, email us at support@innovateuk.ukri.org or call the competition helpline on 0300 321 4357. Our phone lines are open from 9am to 11:30am and 2pm to 4:30pm, Monday to Friday (excluding bank holidays).

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

If your site is located in Scotland, please contact IETF@gov.scot for enquiries on matters of industrial energy efficiency or decarbonisation.

IETF

The UK Government announced £315 million of funding in the 2018 Autumn Budget. The funding is available over the period to 2024. The Department for Business, Energy and Industrial Strategy (BEIS) will manage the Industrial Energy Transformation Fund, with £289 million to invest in England, Wales and Northern Ireland. The Scottish Government will administer £26 million for investment in Scotland and will publish its plans for the funding in due course.

This competition, worth up to £30 million, is the first phase of the IETF. The remaining budget will be invested to support industrial energy efficiency improvements, deep decarbonisation deployment and feasibility and engineering studies. The next phase of the IETF is due to be launched in 2021. For further details please see the Government response to the public consultation on the IETF webpage.

Interactions with other BEIS funds

The IETF sits alongside complementary government investment schemes delivering decarbonisation and cost savings. These include:

Potential IETF applicants for waste heat recovery projects should also consider applying to the IHRS. Please note the IHRS has a maximum grant per project of £1.5 million.

The IETF also sits alongside complementary non-investments schemes designed to increase energy efficiency in business and industry such as the Energy Technology List.

This is a list of energy efficient plant and machinery, such as boilers, electric motors, and refrigeration systems. For a product to be on the ETL, it must meet specific energy-saving or energy efficient criteria. BEIS annually reviews the technologies and products that qualify for inclusion.

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