The Network Innovation Allowance (NIA) is an Ofgem incentive for funding smaller innovation Projects that can deliver benefits to customers.
In conjunction with the Network Innovation Competition (NIC), the NIA forms part of the replacement for the former Innovation Funding Incentive (IFI) that ran under the previous price control. The focus of innovation under the NIA has expanded to incorporate commercial, technical and operational research and development projects to complement the previous IFI focus on asset management.
The NIA is a set annual allowance that allows National Grid, and other Network Licensees a funding opportunity of 0.7% of revenue to be spent on innovation projects, 90% of which can be recovered through the incentive mechanism.
The NIA provides funding for two purposes, to fund projects that meet the criteria detailed below, and to fund the preparation of submissions to the NIC.
Projects must have a direct impact on the Gas Network and include one of the following:
Projects must also ensure that they offer:
Under NIA all project learning must be shared with the UK Network Licensees and other interested parties. As a minimum the following routes to sharing learning are prescribed:
Project Progress Information Annual project progress report published on the publicly available learning portal.
Annual Conference To highlight and share key learning, attended by Network Licensees, Project Partners and other interested parties.
Annual Report Summarises progress of NIA activity, strategy, and significant areas of learning.
Treatment of Foreground IPR Owned by National Grid to ensure dissemination of knowledge and to protect customers.
Research & Development Encouraging operational, technological and commercial innovation in order to provide long term benefit to customers, and to establish a culture of innovation.
Collaboration & Dissemination Working with external partners to solve problems and share new learning.
Customers & Strategy Focusing on new solutions to problems that deliver financial value to customers.
Ofgem To find out more about the Network Innovation Allowance from a regulatory perspective please view the gas and electricity NIA governance documents on Ofgem's website.
Energy Networks Association (ENA) To find out more about current live Network Innovation Allowance projects please visit the ENA Smarter Networks Portal.
Becoming a National Grid Innovation PartnerAn NIA and NIC Position Paper, outlining the contractual requirements for projects funded by NIA & NIC has been made available on our website for your reference.