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IETF deployment of energy efficiency technologies, Spring 2021

Overview:

Organisations can apply for a share of up to £40million for grants to improve the energy efficiency of industrial processes, reducing energy bills and cutting carbon emissions.

This competition aims to support the commercial roll out and permanent installation of technologies at industrial sites. This is the second round of the IETF Phase 1 competition.

The Industrial Energy Technology Fund (IETF) will support the onsite deployment of technologies that improve the energy efficiency of an industrial process or processes.

IETF will award up to £40 million across two strands. These are:

In this strand you must be an industrial business of any size to apply. You can apply on your own or in collaboration with other organisations. Your project must take place at a manufacturing site or data centre in England, Wales or Northern Ireland and be led by the operator of that site.

The other competition strand, IETF energy efficiency and decarbonisation studies, Spring 2021, will fund projects that support energy efficiency and decarbonisation studies.

The IETF is a Department for Business, Energy and Industrial Strategy (BEIS) fund. Innovate UK is delivering part of this competition on behalf of BEIS, which is a joint sponsor. Following the assessment of applications, the awarding, contracting, and monitoring of projects will be delivered by BEIS

The minimum grant support available per project is £100,000. The maximum grant funding that an individual project can claim is £14million. Please refer to the funding section for rules on how much grant funding your organisation can claim.

Open Date:

08/03/2021

Close Date:

14/07/2021

The Industrial Energy Technology Fund (IETF) will support the onsite deployment of technologies that improve the energy efficiency of an industrial process or processes.

This competition aims to support the commercial roll out and permanent installation of technologies at industrial sites.

Eligible technologies must have been proven to work through successful operations or be qualified through test and demonstration.

For further details see the supplementary Technological Scope for Energy Efficiency Studies and Deployment Projects guidance, for further details including a description of technology readiness levels (TRLs). You must check that any proposed technology meets the specific technical requirements.

Energy saving solutions will differ from site to site, but some examples of eligible technologies include:

  • Monitoring and management equipment that improves the efficiency of processes
  • More efficient heat exchange
  • More efficient driers
  • Energy recovery from waste heat
  • Energy recovery from waste pressure
  • Onsite resource efficiency measures to reduce wastage and optimise use of raw materials.
  • More efficient refrigeration or other cooling or heating measures necessary to create and maintain the operational temperature of the industrial process itself (including cooling technologies for data centres)
  • Fuel switching is permitted where it is essential to achieving energy efficiency improvements. Fuel switching must comply with eligibility criteria detailed in the supplementary Technological Scope for Energy Efficiency Studies and Deployment Projects guidance

Portfolio approach

Innovate UK are looking to fund a portfolio of projects.

The portfolio approach is intended to make sure the IETF has a diverse set of projects, tailored to meet the fund’s objectives, balanced across the following variables:

  • Geographical areas
  • Technologies
  • Industrial sectors
  • Organisation sizes
  • Project sizes

Monitoring, evaluation and knowledge sharing

You must submit data throughout the duration and for five years after the end of the project.

BEIS will use this to:

  • Check that payment milestones have been met
  • Evaluate your project to see it has achieved the benefits described in your proposal
  • Make sure that your project has contributed to the overall objectives of the Industrial Energy Technology 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 BEIS.

Your project must:

  • Start by 1 January 2023
  • End by 31 December 2024
  • Have a minimum total grant funding of £100,000

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

Your project work must be carried out at a single manufacturing site or data centre in England, Wales or Northern Ireland.

You can include multiple projects within your application but you must make sure:

  • All projects are located at the same eligible site
  • All individual elements are eligible

If you are submitting multiple projects, we will assess your application as a single submission.

If you want to apply for projects across different sites, you will need to submit one application for each site.

Eligible project costs

The IETF will only award grant funding to cover the eligible costs of deploying technologies where it can be demonstrated that these costs are additional and necessary to achieving the energy efficiency saving.

You must include a counterfactual case as part of your application. This means you have to refer to a similar, less energy efficient investment that would have been credibly carried out without the grant.

The difference between the costs of both cases of investment identifies the energy efficiency-related cost and constitutes the eligible costs.

If the technology’s only purpose is to achieve energy savings (for example in the case of a heat exchanger project) then it is possible to consider the total investment costs as eligible costs.

Commitment to knowledge sharing
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

This competition is aimed at businesses that use energy or produce direct emissions as a result of their industrial processes.

IETF is not seeking to fund general research, development, and testing of a technology solution. Technology developers are not eligible to apply as lead applicants. Industrial processes refer to a set of economic activities as defined by the Standard Industrial Classification (SIC). Businesses are allocated a SIC code at the time of registering at Companies House. You will need to check your business SIC code to make sure you are eligible.
For this competition your business must fall into the following categories of activity:

  • Manufacturing SIC 10 (000) through to SIC 33 (200)
  • Data centres SIC 63 (110)

If you are a parent company with a SIC code which does not reflect the activity carried out at the site of the proposed project, please email ietf@innovateuk.ukri.org with your organisation’s details, project locations and a brief outline of your project. An example of this would be where a data centre is owned by a telecoms company.

Innovate UK will work with you to establish whether the activity at the site is eligible for this competition.

To lead a project your organisation must also:

  • Be a registered business of any size, in England, Wales or Northern Ireland
  • Carry out its project work at a site in England, Wales or Northern Ireland

A site is defined as the postcode, or multiple directly adjoining postcodes at which the project takes place.

The lead applicant must be the owner of the industrial process or data centre operator. A third party (for example, a consultancy or an energy service company) can prepare an application on behalf of the lead applicant. However, BEIS will not have a legal relationship with, or pay money to a third party.

Project team

Lead organisations can collaborate with other organisations provided the project partners meet the criteria below.

To collaborate with the lead your organisation must:

  • Be a business of any size, a research organisation, a research and technology organisation, an academic institution or a public sector organisation. You must read the Supplementary Grant Award Guidance to find out which definition your organisation falls into.
  • 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 into the Innovation Funding Service 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 businesses registered in Scotland or outside the UK

Subcontractors

Subcontractors are allowed in this competition.

Subcontractors can be from anywhere in the UK and you must select them through your usual procurement process.

You can use subcontractors from overseas but must make the case for why you could not use suppliers from the UK.

You must also provide a detailed rationale, evidence of the potential UK contractors you approached and the reasons why they were unable to work with you.

Innovate UK expect all subcontractor costs to be justified and appropriate to the total eligible project costs. Innovate UK will not accept a cheaper cost as a sufficient reason to use an overseas subcontractor.

Applications which are successful at the assessment stage will undergo due diligence. Applicants must be willing to dedicate sufficient resource to assist us in completing this process.

Previous applications

You can use a previously submitted application from the first round of the IETF phase 1 to apply for this competition. This took place in the Summer 2020. Some application questions have changed, you must make sure that you are eligible, your proposal is in scope and the questions are answered in full.

Subsidy control (and state aid where applicable)

This competition provides funding in line with the UK’s obligations and commitments to Subsidy Control. Further information about the UK Subsidy Control requirements can be found within the EU-UK Trade and Cooperation agreement and the subsequent guidance from the department of Business, Energy and Industrial Strategy (BEIS).

IETF is unable to award grant funding to organisations that are considered to be in financial difficulty. Please see the Supplementary Grant Award Guidance for more information. Innovate UK will conduct financial viability and eligibility tests to confirm this is not the case following the application stage.

European Commission State aid

You must apply under European Commission State aid rules if you are an applicant who is conducting activities that will affect trade of goods and electricity between Northern Ireland and the EU as envisaged by Article 10 of the Protocol on Ireland/Northern Ireland in the EU Withdrawal Agreement.

In certain limited circumstances, the European Commission State aid rules may also apply if you are an organisation located in England, Wales, or Scotland and conduct activities that affect the trade of goods and electricity between Northern Ireland and the EU. For further information, please see section 7 of the BEIS technical guidance.

For further information see Supplementary grant award guidance and BEIS guidance on the Northern Ireland Protocol.

For applicants subject to the European Commission State aid rules, applicants will be required to prove that they were not an “Undertaking in Difficulty” on the date of 31 December 2019 but became a UID between 1 January 2020 and 30 June 2021. Innovate UK will ask for evidence of this.

Further Information

If you are unsure about your obligations under the UK Subsidy Control regime or the State aid rules, please take independent legal advice.

You must make sure at all times that the funding awarded to you is compliant with all current Subsidy Control legislation applicable in the United Kingdom.

This aims to regulate any advantage granted by a public sector body which threatens to or actually distorts competition in the United Kingdom or any other country or countries.

If there are any changes to the above requirements that mean Innovate UK need to change the terms of this competition, they will tell you as soon as possible

Innovate UK have allocated up to £40million to fund projects across two competition strands:

The majority of the funding will be allocated in this deployment strand.

Grant funding thresholds

The minimum threshold for grant awards is £100,000 towards the total eligible costs of the project. The maximum grant funding that an individual project can claim is £14million.

Your application can be made up of multiple projects and there is no minimum cost per project. You must make sure that:

  • The total grant funding for each application is at least £100,000
  • The total grant funding for individual projects does not exceed £14million

You should consider whether your application falls within these thresholds by estimating how much of the total project cost you can claim based on the rules outlined in the funding section of this competition.

Innovate UK will assess your application in terms of its value for money. You must only apply for the minimum amount of grant to enable the project to go ahead.

Eligible costs

IETF will award grant funding to cover eligible costs of deploying technologies if you can show that these costs are additional and necessary to achieving the energy efficiency saving. The extra investment costs necessary to achieve the higher level of energy efficiency will be determined as follows:

  • Where the costs of investing in energy efficiency can be identified in the total investment cost as a separate investment, this energy efficiency-related cost will constitute the eligible costs
  • In all other cases, the costs of investing in energy efficiency are identified by reference to a similar, less energy efficient investment that would have been credibly carried out without the grant. The reference investment should be similar in terms of size, capacity, and all other technical characteristics besides those that achieve the energy saving, and meet relevant minimum standards. This is the counterfactual case. The difference between the costs of both investments identifies the energy efficiency-related cost and constitutes the eligible costs

You must include a justification for the costs claimed in your application

Each project partner can claim for their share of the eligible project costs. The maximum grant value that each partner can claim is determined by the rules below. 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.

You can apply for funding for multiple projects if you are 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 £14million minus the amount already received. The maximum amount of funding a single project can receive is £14million in total. Aggregated applications may exceed this.

Ineligible costs

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 following are costs which are ineligible:

  • Costs not directly linked to the achievement of the energy efficiency improvement
  • The value of contributions in kind, for example a contribution in goods or services as opposed to money
  • Depreciation costs incurred from production down-time

You cannot apply for or obtain, duplicate funding for the same funded activities covered by the grant. Duplicate funding means funding provided by another source for the same activity.

Where you declare any match or pooled funding, IETF will not consider this duplicate funding.

You cannot claim for the costs of operating your installed energy efficiency technology, or for any preparatory work conducted before the grant is awarded.

Assisted areas

The government can in certain circumstances, offer additional financial support to organisations acting economically if they are conducting projects located in specific geographical 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

For further information on assisted areas please see the Supplementary Grant Award Guidance.

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.

For organisations based in the England and Wales you must refer to the Company accounts guidance for definitions of different organisation sizes.

For projects subject to the European Commission State aid rules, please read the EU definitions of different organisation sizes.

Through this strand of the competition, Innovate UK are not funding:

  • Technologies that are not proven to work through successful operations or are not qualified through test and demonstration
  • Repair and maintenance projects that would be undertaken in the normal course of business
  • Feasibility or engineering studies for energy efficiency solutions
  • Plant closure projects
  • New build plant or expansions
  • Energy efficiency measures that are not integral to the industrial process, including:

– building lighting

– space heating and cooling for buildings where not integral to the industrial process

– on or off-site transport

  • Electricity generation, including the installation of new renewable projects like solar panels or wind turbines
  • Fuel switching that does not achieve energy efficiency improvements.
  • Combined heat and power (CHP) upgrades to existing plants

Cresco Innovation works with companies to develop and implement innovation strategies. We help client companies identify opportunities to develop new products and services, and then create a package of support to ensure that the idea is turned into a commercial reality.

Our services include securing grants (as a team we have raised around £40million over three years), business planning, IP advice, access to finance and funders, project management and IP commercialisation support.

We regularly act as the interface with the funding bodies and help clients ensure that their projects are properly managed to ensure the best outcome for all.

Call to find out more

If you’d like to know more about this competition, please give us a call on 01509 261182 and one of our team will be delighted to help you access this funding opportunity for your business.