+44 (0)1509 261182

IETF energy efficiency and decarbonisation studies, Spring 2021

Overview:

Organisations can apply for a share of up to £40million to carry out feasibility and engineering studies into energy efficiency and decarbonisation technologies for industrial processes.

This competition aims to support feasibility and engineering studies necessary to enable an investment decision in energy efficiency and deep decarbonisation solutions. This is the second round of the IETF Phase 1 competition.

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

In this strand, you must be an industrial businesses 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 deployment of energy efficiency technologies, Spring 2021, will fund projects that deploy energy efficiency technology.

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 total eligible project costs for a feasibility study must be at least £30,000 and for an engineering study must be at least £50,000. 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

This strand of the competition aims to:

  • Help industrial companies build a pipeline of future deployment projects by supporting feasibility and engineering studies
  • Reduce the costs and risks of either industrial energy efficiency or decarbonisation technologies

The intention is to support studies necessary to facilitate the permanent installation of technologies at industrial sites, rather than general research, development, and testing of a technology solution. Studies must explore an eligible technology, see Specific Themes section for details. Technology developers are not eligible to apply as lead applicants.

Feasibility studies

A feasibility study aims to investigate a chosen technological solution and the technical, economic and operational impacts that this technology would have if it was to be deployed to the process in the future.

Applicants carrying out a feasibility study of technologies associated with energy efficiency should aim to demonstrate the economic case for the technology and associated emissions reductions, while ensuring that the technological barriers are identified and are manageable.

For deep decarbonisation feasibility studies, applicants should demonstrate that the technology is sufficiently well-developed and feasible to be used in the process, while increasing understanding of the economic impacts that deploying the solution will have on the process. Feasibility studies should not be carried out as part of an options analysis, as a single technology should have been already identified prior to the study.

If you are carrying out a feasibility study it must:

  • Investigate a defined technology solution that meets the eligibility criteria of the fund. Technologies must improve the energy efficiency, reduce the greenhouse gas emissions of an industrial process or achieve both
  • Establish whether or not the potential technology is technically and commercially viable at the lead applicant’s site
  • Enable the applicant to reach a conclusion on whether further development of the proposed technology solution is cost-effective, with the aim of eventually deploying the technology permanently
  • In the case of energy efficiency, focus on determining the costs and benefits of the scheme, alongside how it would perform with regards to the existing process (including any potential impacts on operability, environmental benefits and scheduling of the plant)
  • In the case of deep decarbonisation studies, focus on the technical barriers associated with deploying this technology and any specific barriers to deployment within this process, in addition to an assessment of the economic impacts of deploying this solution

Engineering study

An engineering study is a detailed project plan that identifies specific technical and operational requirements, equivalent to a Front-End Engineering and Design (FEED) study. The output of an engineering study is expected to be a full project plan, incorporating all of the information required to fully understand a project and to allow the project to be at a state where a final investment decision can be made.

Your project must provide sufficient detail to arrive at an investment decision at the end of the engineering study, with key technical and project scheduling work already complete, including indication of full confidence that the project is ready to be delivered on receipt of internal approval.

Innovate UK expect your engineering study to show appropriate consideration of:

  • Technical approach including performance and commissioning and acquisition of materials, expertise etc.
  • Carbon reduction and other benefits analysis
  • Health and safety, and permitting
  • Planning and consent
  • Environmental impacts
  • Economic analysis and forecasting
  • Project delivery requirements and scheduling including identified contractors
  • Project risks and risk management strategy

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 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.

Specific themes

Both feasibility studies and engineering studies must focus on one of the following.

Energy efficiency

Energy efficiency studies must investigate technologies that improve the energy efficiency of an industrial process or processes on the identified site. These technologies will be primarily focussed on reducing the energy requirements of existing processes on site. Eligible technologies must have been proven to work through successful operation on existing processes and/or be qualified through test and demonstration.

See the supplementary Technological Scope for Energy Efficiency Studies and Deployment Projects guidance for further details, including a description of TRLs. Examples of eligible technologies include but are not limited to: improved process control, more efficient equipment, waste heat and energy recovery.

Deep decarbonisation

Deep decarbonisation studies must investigate technologies that will result in a significant reduction in the greenhouse gas emissions of an industrial process or processes on the identified site, focusing specifically on reducing the carbon content of any energy used on site. These technologies will not necessarily have an energy efficiency benefit.

Innovate UK recognise that decarbonisation technologies may be less developed in commercial settings, and will therefore support technologies at 7, 8, 9 and above. This means that the technology must either:

  • Have been proven to work through successful operations and/or is qualified through test and demonstration

or

  • Is currently at a prototype stage or requires demonstration of an actual system prototype in an operational environment

See the supplementary Technological Scope for Decarbonisation Studies guidance for further details, including a description of TRLs. Examples of eligible technologies include but are not limited to: adaptations to switch to lower carbon fuels, electrification, carbon capture and usage.

Your project must:

  • Start by 01 July 2022
  • End by 30 June 2024
  • Up to 12 months if it is a feasibility study
  • Up to 24 months if it is an engineering study

The end-beneficiary of the study must be 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 studies, Innovate UK will assess your application as a single submission.

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

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. Industrial processes here 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 10(000) through to 33(200)
  • Data centres 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 or work alone your organisation must also:

  • Be a registered business of any size in England, Wales or Northern Ireland
  • Be the manufacturer or data centre operator at the site that is the focus, and end-beneficiary of the study

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.

The competition is targeted at technologies that will reduce the onsite energy use or emissions generated by industrial processes or datacentres. In some cases, Combined Heat and Power (CHP) equipment integral to the process may be owned by a separate entity or may not be co-located on the immediate site. Studies investigating eligible fuel switches for CHP plants will be considered in scope provided that at least 70% of both the heat output and electricity output produced by the CHP Plant is used for an eligible process by the lead applicant or consortium. The lead applicant must in this case be an eligible end-user, and the CHP operator must be a collaborating partner on the project.

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

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 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. Further information can be found in the Supplementary Grant Award Guidance.

Previous applications

You can use a previously submitted application from the first window of the IETF 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 the deployment strand.

Grant funding thresholds

The total eligible project costs for a feasibility study application must be at least £30,000. The maximum grant that can be awarded for a feasibility study is £7million.

The total eligible project costs for an engineering study application must be at least £50,000. The maximum grant that can be awarded for a feasibility study is £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

This competition provides grant funding towards the cost of the project. Industry must also contribute funding. It is your responsibility to make sure your organisation is eligible to receive government support. You must not claim funding from any other source for the same set of eligible costs. This would constitute duplicate funding.

Each project partner can claim for their share of the 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.

Please refer to the Supplementary Grant Award Guidance.

Research organisations

Any research organisations in your project team undertaking non-economic activity as part of the study 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.

Feasibility studies

The maximum grant funding amount an organisation can receive is £7million for each project it is involved with.

For feasibility studies you could receive funding for your eligible costs of:

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

Engineering studies

The maximum grant funding amount an organisation can receive is £14million for each project it is involved with.

For engineering studies you could receive funding for your eligible costs of:

  • Up to 45% if you are a micro or small organisation
  • Up to 35% if you are a medium-sized organisation
  • Up to 25% if you are a large organisation

If your engineering study project qualifies as an ‘effective collaboration’ or widely disseminates knowledge, you could receive funding for your eligible costs of:

  • Up to 60% if you are a micro or small organisation
  • Up to 50% if you are a medium-sized organisation
  • Up to 40% if you are a large organisation

For further information please see the Supplementary Grant Award Guidance.

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

For projects based in Northern Ireland, please read the definitions of different organisation sizes.

Effective collaboration and wide dissemination

Innovate UK are expecting collaborative efforts on engineering studies. ‘Effective collaboration’ means collaboration between at least two independent parties. The goal must be either:

  • To exchange knowledge or technology

or

  • To achieve a common objective based on the division of labour where the parties jointly define the scope of the collaborative project, contribute to its implementation and share its risks, as well as its results

Contract research and provision of research services are not considered forms of collaboration.

For effective collaboration to apply between businesses no one business partner can take more than 70% of the total eligible project costs. For collaborations between businesses and research organisations, the research organisation must bear at least 10% of the total eligible project costs and have the right to publish its own research.

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

  • Option analysis or trade studies
  • Repair and maintenance projects that would be undertaken in the normal course of business
  • Plant closure projects
  • New build plant or expansions

Energy efficiency measures cannot include:

  • 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 procession or off-site transport

  • Electricity generation, including the installation of new renewable projects like solar panels or wind turbines
  • Combined Heat and Power without fuel switching

Decarbonisation measures cannot include:

  • Off-site work related to the wider enabling infrastructures necessary for:

– Transportation and long term CO2 storage solutions

– Supply of hydrogen to the site

  • Direct air capture technologies
  • Switches to fuels more carbon intensive than the gas grid, including fuels that possess equal carbon intensity to grid gas but incur additional emissions during transportation from source to industrial site where the fuel is being used. Note specific restrictions on biomass in the Technological Scope for Decarbonisation Studies guidance

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.