Innovation Funding Incentive (IFI)
Under the Gas Distribution Price Control Review the energy Regulator, Ofgem, introduced the Innovation Funding Incentive for Sustainable Development scheme (IFI/SD). The basis of the scheme is outlined below and full details can be found under the Gas Transporter Special Licence Condition E11, as well as at Ofgem’s website www.ofgem.gov.uk
- A Gas Distribution Network is allowed to spend up to 0.5% annually of it’s Distribution Network Transportation Activity Revenue on eligible IFI/SD projects
- The GDN is allowed to recover 80% of its eligible project expenditure under the Licence Condition, with a cap on its internal cost at 15%
- Eligible projects have to meet the criteria set out in the Gas Distribution IFI/SD Good Practice Guide and as a minimum align with at least one of Ofgem’s five sustainable development themes:
- Managing the transition to a low carbon economy
- Eradicating fuel poverty and protecting vulnerable customers
- Promoting energy saving
- Ensuring a secure and reliable gas and electricity supply
- Supporting improvement in all aspects of the environment
The aim of the scheme is to allow the GDNs to invest in research and development, even when project costs and benefits span beyond the Price Control’s five-year horizon. In addition the Gas Distribution Networks are encouraged to work in collaboration with and receive ideas from other interested parties, including, but not limited to, consultancies, academia, technical development companies and other Gas Distribution companies.
IFI Submissions
The GDNs are keen to receive ideas and proposals from interested parties and are in the process of setting up formal and timed arrangements for submission and consideration. In the meantime if you have an idea that you would like to be considered, please submit this by completing the idea form. The Good Practice Guide will aid in understanding how this should be completed.
In the first instance, please submit your IFI ideas to erika.melen@energynetworks.org using the form below.
