THREE “globally innovative” projects to deliver smart and flexible energy systems for customers are sharing in £20.6 million of funding from regulator Ofgem.

SP Energy Networks is developing new technologies to help create a smart electricity grid which will be capable of coping with rising demand for power to charge electric cars and other low carbon technologies.

The UK’s electricity network has been traditionally largely based on “one way” supply with electricity generated by a small number of large power stations.

But the rise in demand for power for electric vehicles and other low carbon technologies like heat pumps for homes, coupled with an upsurge in customers wanting to connect their own renewable energy sources to the network, has led to a pressing need for the UK to develop a smart grid fit for the 21st century, SP Energy Networks said.

Ofgem announced £7.3m funding for a five-year trial of the LV Engine project, a new type of sophisticated network power transformer which can closely control network voltage and power flow and can provide a direct current (DC) power supply – essential for electric vehicle charging.

LV Engine will be delivered by SP Energy Networks in collaboration with fellow electricity network operator UK Power Networks.

SP Energy Networks will also lead a separate research scheme called Fusion to be trialled in the East Fife area.

The scheme will create what is said to be the UK’s first “intelligent” local energy marketplace where energy flexibility can be bought and sold by consumers in an open and competitive market.

It is anticipated that this project could enable potential customer savings of more than £200m by 2050 and reduce carbon emissions by over three million tonnes.

Jim McOmish, head of distribution networks at SP Energy Networks, said: “Business and residential customers are seeking to maximise the efficiency and lower the cost of their energy use, and the flexibility of their demand for energy is a marketable commodity.

“At the moment there is no open accessible transparent market to buy and sell this flexibility, and the challenge is building one which unlocks that value for everybody – electricity providers on one side and consumers on the other.”

Fusion will receive £5.3m for a five-year trial project.

These two projects are in addition to the £8.01m of funding announced by Ofgem in October for Integrated Network Constraint Management for Dumfries and Galloway which will help create a smart and flexible energy system for customers.

Frank Mitchell, CEO of SP Energy Networks, said: “These globally innovative projects will enable customers to be fully engaged in the electricity market, creating additional income through local generation and storage, whilst unlocking additional network capacity to make a truly nationwide network of electric vehicles a reality.

“I am delighted to secure this additional funding on behalf of our customers. These awards, which come hot on the heels of another recent Ofgem funding award to roll out the latest network monitoring and control technology in the Dumfries & Galloway area, demonstrate our continued leadership in commercial and technical innovation together with our ongoing ambition and capability to innovate in the best interests of our customers, communities and wider stakeholders.”