Heat Network Demonstration SBRI: Competition guidance Megan Cooper DECC Energy Innovation Delivery

Support for innovative technologies that help address the challenges associated with a cost effective, low carbon future; Investment focusses on technology areas where there are clear market failures and a strong justification for Government intervention; Funding targets later stage innovation i.e TRLs 5/6 to 8/9, although earlier stages will be considered where justified; Support must be legal under EU law! DECC Innovation Funding

Government funding for energy R&D Business Innovation and Skills Research Councils Energy Technologies Institute Innovate-UK Department for Energy and Climate Change Central Government Policy Department Demonstration Applied research & development Basic Research Pre-commercial deployment (RHI, RO, FIT, EMR, etc) DECC < < < < < < < < < < < < < < < < < < < Feedback loop < < < < < < < < < < < < < < < < < < < Technology push > > > > > > > > > > > > > > > > > > > > > > > > > > > < < < < Market pull Demonstration

Mechanism that enables Government to achieve innovative solutions to particular challenges; Challenge – driven innovation; No existing solution; Encourages participation from all innovators, large or small. Small Business Research Initiative (1) ‘When a government department or other public sector body faces entractable challenges for which no solution exists today or the current solutions are substantially inadequate it needs a way to engage with new ideas and new suppliers. SBRI provides the mechanism to achieve this.’

Pre-commercial procurement of R&D; Competition in 2 phases with down selection at each stage – Phase 1 assessed via application process; – Phase 2 assessed via output from Phase 1. Small Business Research Initiative (2) ‘SBRI is a quick, simple and well-established process that enables the development of innovative products and services in response to challenges faced by government departments and public sector bodies. It leads to better public services and economic development.’

‘The benefits are felt on both sides. Finding a solution to a particular challenge leads to public sector gains, with improvements in efficiency and effectiveness. The successful business partners get finance to develop their innovative ideas. Together they generate growth.’ Risk - benefit sharing approach: – Procurement of solutions at or below market conditions; – Funding for business partners enables innovation; – Output and IPR reside with contractor (with rights of use for DECC); – Results must be publicly available. Small Business Research Initiative (3)

Structure: Two competed phases: – Phase 1 – assessed via applications; – Phase 2 – assessed via Phase 1 outputs (not open to new applicants). Finance: Funding of up to £7m available until March 2016; – Up to £1m for Phase 1 feasibility studies; – Up to £6m capital funding for Phase 2 demonstration activities. 100% procurement of eligible R&D costs; Queries: Competition Details (1)

Key Dates (Phase 1) Competition Details (2) Phase 1 (technology feasibility and demonstration plans) Competition opens2 nd October 2014 Briefing and industry engagement event2 nd October 2014 Deadline for applications28 th November 2014 Notification of Phase 1 assessment resultsDecember 2014 Phase 1 beginsJanuary 2015 Deadline for Phase 1 reportMarch 2015

Key Dates (Phase 2) Competition Details (3) Phase 2 (demonstration and trials) Notification of phase 2 project selectionApril / May 2015 Phase 2 development commencesMay/June 2015 Phase 2 delivery and monitoringJune 2015 to March 2016 Phase 2 development reportMarch 2016

!! Only eligible proposals will be taken forward for full assessment !! Eligible proposals will: Pre-commercial stage of development (TRL 6-9); Address the call scope; – Heat network technologies – Timeframe – TRL – Innovation – Interface with heat network Describe all phases of the project; Cost savings in line with SBRI requirements (compared to exclusive development); Led by a single business. Eligibility Criteria

Proposals will be assessed against the following criteria: Technical approach / Innovation (40) Project Plan (20) Skills and Expertise (15) Market Potential and Business Case (15) Cost (10) Scoring: The total score available is 100. Each criteria is divided into sub-criteria, scored on a scale of 1-5 and weighted. Evaluation Criteria (1)

Technical approach / Innovation (Total score 40) Clear description of the proposed solution and how it addresses the challenges as set out in this guidance document (weighting x 1); Clear description on the particular innovative step(s) being proposed and how they will be integrated into existing technologies (weighting x 1); Current and proposed stage of development. Please refer to TRLs and provide an indication and justification of current, and proposed TRL (weighting x 1); Description and evidence of the product’s energy performance making explicit reference to carbon savings compared to a relevant counterfactual (weighting x 2); Cost efficiencies associated with your technology solution and how this compares to current technologies. This can include reduction in costs of equipment, installation, maintenance etc (weighting x 2); Potential for reduced complexity / standardisation presented by the technology (weighting x 1). Evaluation Criteria (2)

Project Plan (Total score 20) Detailed description of work packages and associated timelines (include a Gantt chart) (weighting x 1); List of milestones and deliverables with associated dates and invoice values (weighting x 1); Resource management plan, including: – Team structure – Management of sub-contractors and other stakeholders – Requirements for external support eg network operators, installers, consulting engineers. (weighting x 1); Key risks and dependencies of the project, including mitigation plans. Risks should be presented in the table provided in the application form (weighting x 1). Evaluation Criteria (3)

Skills and Expertise (Total score 15) Understanding of heat network technologies, infrastructure and implementation (weighing x 1); Evidence that the team has relevant skills and expertise to undertake the project (weighting x 1); Evidence of appropriate networks across the heat industry supply chain (heat exchangers, controls, heat pumps/other heating technologies) (weighting x 1). Evaluation Criteria (4)

Market Potential and Business Case (Total score 15) Assessment of market potential, including costings (product, maintenance, installation, peripheral equipment) and payback period (weighting x 1); Indication of how the technology can/will be scaled-up, and potential exploitation across the UK (weighting x 1); Business case for roll out and commercialisation. The proposal should demonstrate how the product will achieve credibility in the market place through product proving and accreditation (weighting x 1); Evaluation Criteria (5)

Cost (Total score 10) Cost breakdown using the table provided in the application form (weighting x 2). Applicants should clearly state where cost savings are being provided compared to exclusive development contracts. Price will be marked proportionately to the lowest bid. The lowest bid will receive maximum marks for the price elements and then all other bids will be marked proportionately to that bid. Where contractors indicate options, they should clearly indicate their preferred approach, which the cost and other criteria will be scored against. Evaluation Criteria (6)

Guidance and application form available via DECC website or contracts finder: DEADLINE : Midday, 28 November digital copy to: Maximum size is 10MB - if needed break submission down into smaller parts. 3 signed hard copies to be received by DECC by deadline date. Assessment will take place in early December and may include interviews where required. Notification of results expected later in December (before xmas!) Application Process

Intellectual Property: Suppliers will retain the IP generated from the project and are expected to identify and protect patentable knowledge within 3 years of its creation; DECC require a UK-wide licence and the right to grant sub-licences, to use and/or publish information arising from the Project Publication of Results: After contract negotiation – summary of project detail including costs and participants; After completion of project – summary including key findings; Applicants are expected to make the findings of their research publicly available throughout delivery eg via conferences, peer reviewed journals etc. Further Information (1)

Reporting Project Delivery Stage: Reporting to track project progress and ensure payments are made according to a schedule of milestones. Project evaluation Participate in evaluation of scheme during and for several years after final grant payments to assess whether funds have been used effectively. Further Information (2)

Thank you for your attention Megan Cooper Energy Innovation Delivery