Low Carbon Networks (LCN) Fund
ENA Innovation Team
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Carbon Emission Reduction Technologies
As part of the electricity distribution price control arrangements that run from 1 April 2010 to 31 March 2015, Ofgem established the Low Carbon Networks (LCN) Fund. The Fund allows up to £500m support to projects sponsored by the distribution network operators (DNOs) to try out new technology, operating and commercial arrangements. The objective of the projects is to help all DNOs understand what they need to do to provide security of supply at value for money as Great Britain (GB) moves to a low carbon economy.
There are two tiers of funding which are available under the LCN Fund. The First Tier is designed to enable DNOs to recover a proportion of expenditure incurred on small scale projects. Under the Second Tier of the LCN Fund, Ofgem facilitates an annual competition for an allocation of up to £64million to help fund a small number of flagship projects. In the first year, 4 projects were awarded Second Tier funding totalling £63.6million through the annual competition and 11 projects were registered under the First Tier.
These projects involve the DNOs partnering with suppliers, generators, technology providers and other parties to explore how networks can facilitate the take up of low carbon and energy saving initiatives such as electric vehicles, heat pumps, micro and local generation and demand side management, as well as investigating the opportunities that smart meter roll out provide to network companies. As such the Fund should also provide valuable learning for the wider energy industry and other parties.
The Low Carbon Networks (LCN) Fund aims to provide a financial catalyst for innovation on GB electricity networks and as a result smarter, more innovative, less carbon intensive networks.