Ofgem's Strategic Innovation Fund (SIF) has opened Round 5 of its Discovery Phase, with up to £200k available per project to help Britain's energy networks plan and run gas, electricity, heat and hydrogen as one joined-up system.
Challenge 7, Whole System Optimisation, is delivered by Innovate UK in partnership with Ofgem. It asks how whole system approaches can drive the decarbonisation of gas and the wider multi-vector energy system, from better coordination between gas and electricity networks through to evidence on what the future gas grid should look like. The energy networks lead every project, so if you're a technology developer or research organisation with expertise in cross-sector energy modelling or integrated energy systems, you'd take part as a project partner. Discovery is the first of four phases, and successful projects are invited to apply for Alpha, then Beta and Deployment.
Below, I have explained the key things you need to know about this competition before you apply: who is eligible, how much funding is on the table, and what the application process looks like.
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Who is Eligible?
Your Organisation
You can't lead this competition as a business. The lead applicant must be an Ofgem licensed gas distribution, gas transmission, electricity transmission or electricity distribution network, or the National Energy System Operator (NESO), and it must work with at least one other organisation as a project partner.
This is where you come in. Ofgem particularly encourages projects that involve SME technology developers and growth companies, so if you're a micro, small or medium-sized enterprise, you can join a network-led consortium as a project partner. Other organisations can also take part as collaborators, including:
- Academics and independent researchers
- Other licensed energy network companies
- Start-ups and disruptors
- Suppliers
Challenge 7 also names the partners each theme must include:
- Theme 1, whole system modelling and scenario analysis: NESO
- Theme 2, development and demonstration of high-impact multi-vector configurations: NESO, plus a technology provider or research institution specialising in cross-sector energy modelling
Every project partner must be responsible for at least one Discovery Phase deliverable. The competition is run on a no subsidy basis, which means the funding can't give any organisation an economic advantage, so it's worth taking independent legal advice on what that means for you before you apply.
Your Project
Your project must:
- Be completed within five months and end by 31 May 2027
- Include a contribution from private funds of at least 10% of total project costs
- Request no more than £200,000 of SIF funding, excluding VAT
- Start on the first of a month, after 1 January 2027
You can also include non-funded partners, including organisations based outside the UK. They cover their own costs, and those costs still count towards your total eligible project costs.
Your project must also:
- Address one of the two Challenge 7 themes: whole system modelling and scenario analysis, or the development and demonstration of high-impact multi-vector configurations
- Consider the SIF cross-cutting areas, which cover customer focus, scalability, data and digitalisation, shared learning, skills, supply chains and resilience
- Deliver a net benefit to energy consumers, like lower costs, reduced emissions or new products and services
- Focus on network innovation that benefits GB energy network infrastructure, operation or consumers
- Plan a route from Discovery through live testing in Alpha, large-scale demonstration in Beta and deployment into business as usual
How Much Funding Can I Apply For?
SIF funding works differently from a standard Innovate UK grant, because the award is made to the lead network rather than to each partner. Each partner enters its own costs in the application, and the lead network is accountable for the project's deliverables.
Discovery projects can request up to £200,000 of SIF funding, excluding VAT.
Applying as a Company
| Project Type | Maximum SIF Funding | Minimum Private Contribution |
|---|---|---|
| Discovery Phase* | £200,000 | 10% of total project costs |
*Discovery is the first of four SIF phases. It defines the problem and the value of solving it, ahead of live testing in Alpha, large-scale demonstration in Beta and Deployment.
Funding Example
If your consortium's total project costs are £220,000, SIF could cover up to £198,000. You will need to fund the remaining £22,000 from other sources, like R&D Tax Relief, investment or loans. Ofgem treats contributions above the 10% minimum as better value for money, so a larger contribution can strengthen your application.
Applying as a Non-Commercial Organisation
Universities, research organisations and other non-commercial bodies can join as project partners, and Theme 2 specifically calls for a research institution or technology provider with cross-sector modelling expertise. The same rules apply as for companies: the award goes to the lead network, and the project as a whole must meet the 10% private contribution.
How Do I Apply?
The deadline for applications is 21 October 2026.
Applications are submitted via Innovate UK's Innovation Funding Service (IFS) portal. The lead network starts the application and invites each partner, who then enters their own project costs.
The application is split into three sections:
Project Details
This section gives the assessors background on your project and isn't scored. You'll need to provide:
- A public description of your project
- Details of your application team
- Your chosen innovation challenge, challenge aim and focus theme
- Your project title, start date and duration
Your public description can be up to 150 words.
Application Questions
There are 17 questions in total:
- Five administrative questions covering the lead network, animal testing, international collaboration, export licences and trusted research
- Twelve questions assessed against the SIF eligibility criteria, covering your problem statement, portfolio alignment, a two-minute video, innovation, impacts and benefits, team, NESO involvement, project management, outputs and dissemination, intellectual property and value for money
Each answer can be up to 400 words. You can include PDF appendices for the portfolio alignment and innovation questions, and you'll need to upload a completed Project Management Template, including a Gantt chart, for the project management question.
Finances
Each organisation in your consortium enters its own Discovery Phase costs, organisation details and funding details, excluding VAT.
Three independent assessors will score your application against the SIF eligibility criteria, and Ofgem makes the final decision on which projects are funded.
If you're successful, you'll be notified on 17 November 2026 and invited to apply for the Alpha Phase once Discovery is complete.
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