The value of government support in demonstrating energy efficiency innovations

Posted on 29 Apr 2019 by The Manufacturer

When it comes to adopting energy saving innovations, perceptions of risk mean there is often a race to be second. In choosing new technologies – especially those that require higher capital expenditure initially, businesses prefer to invest in something that is already tested and successful.

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A hesitancy to try new approaches to energy efficiency can leave innovations stranded. Technology developers’ efforts to attract investment, demonstrate, and scale new technologies, may be hampered by perceptions of risk – known as the innovation ‘valley of death’.

This stage in a technology’s development is where government support can make a major difference. By funding the demonstration of novel technologies, the perceived risk can be reduced, helping innovations to reach the market faster, deliver benefits to businesses, and boost the UK economy.

The Industrial Energy Efficiency Accelerator (IEEA), a key component of the government’s Industrial Strategy and Clean Growth Strategy, seeks to achieve precisely this, funding operational demonstrations of energy saving innovations within British industry, helping to bridge the innovation valley of death and deliver a real impact.

This £9.2m programme, originally launched in 2017, is now calling for a second round of applications.

The second application phase for the Industrial Energy Efficiency Accelerator is currently underway with around £5m funding still available, and will close on 30 April 2019. Find out more about the programme and how to submit a project idea.

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Cutting energy costs and boosting competitiveness

Industry accounts for 17% of final energy consumption in the UK and is responsible for around 20% of our total carbon emissions. Unsurprisingly, the financial cost of all this energy represents one of the most significant areas of overhead for companies and improved efficiency can offer a genuine competitive advantage.

However, industrial processes present a particular challenge. There are often efficiency gains to be found through incremental improvements and better maintenance. But what are really needed are step change innovations that can significantly improve performance.

The purpose of the IEEA is to support this level of innovation, to help drive efficiencies in energy consumption, by accelerating the development of energy saving technologies, and ultimately increase their availability for British industry. However, the journey for a novel technology to reach broad market acceptance isn’t always easy.

The IEEA programme is open to technology developers who are ready to demonstrate their solution, paired with industrial companies who are willing to host a trial. Applicants usually make a joint application, and the programme team can help facilitate the relationship.

Successful applications receive support and funding for demonstration in an operational environment, creating value for both parties. At the same time, this can spark interest from other funding sources or potential customers, because of the added credibility of results from a real world setting. There is also the due diligence factor gained by being monitored as part of a government-backed accelerator programme.

From a national perspective, targeted investment in this area provides a powerful incentive for innovators to develop technologies in the UK and bring their benefits to UK industry. This in turn helps to drive economic growth, creating or securing manufacturing jobs, and potentially providing lucrative export opportunities.

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The size of the prize

In the first round of the IEEA, seven innovative energy efficiency projects were selected. The total value of these demonstrations was £5.3m, with £2.7m provided directly through government grant funding, and the remainder coming from private sector investment.

The industry partners represent sectors including: cement production, engine manufacturing, food & drink, and paper & pulp. The novel innovations being demonstrated are equally diverse and cover a range of technologies including: heat recovery, energy storage, new techniques for hygiene processes, and new de-watering processes.

Replication of these projects within their target sectors could collectively save more than 4,500 gigawatt hours of energy across industry over the next 10-15 years – equivalent to the total annual energy consumption of the UK textiles industry.

This amounts to substantial financial savings to those businesses, projected to be nearly £160m, as well as saving the equivalent of more than 900,000 tonnes of carbon dioxide.

The IEEA demonstrates that technology innovation in industry can play a significant role in meeting national decarbonisation goals, showing businesses that economic prosperity is possible at the same time as taking serious action on climate change.

This will benefit British businesses today, as well as helping the UK achieve its goals under the Climate Change Act and contribute to meeting international ambitions under the Paris Agreement.

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