Shaping ENA's innovation strategy for the future of UK energy networks

As energy networks prepare for a more electrified, decentralised and data-driven future, they face growing pressure to deliver innovation that creates measurable value for consumers and the wider energy system. Working with Energy Networks Association (ENA) and participating network operators, LCP Delta helped develop the 2024 Energy Networks Innovation Strategy, creating a shared framework to guide investment, collaboration and deployment. The strategy gives networks, innovators and policymakers a common roadmap for directing innovation towards the challenges and opportunities that will shape the energy system through to 2050.

Why network innovation needed a clearer direction

The UK's energy networks have a critical role to play in delivering net zero. Rapid electrification, increasing volumes of renewable generation, growing flexibility markets and rising consumer expectations are transforming how networks are planned and operated.

By 2024, network operators were managing one of the world's most active innovation portfolios. Since 2009, thousands of innovation projects had explored new technologies, business models and operational approaches across gas and electricity networks. However, as the pace of change accelerated, the sector recognised the need for a more coordinated approach to ensure innovation efforts remained aligned with consumer needs, regulatory priorities and long-term decarbonisation goals.

Without a shared direction, there was a risk that valuable innovation activity would become fragmented, opportunities for collaboration would be missed and successful projects would take longer to move into business-as-usual operations.

To address this challenge, Energy Networks Association (ENA) commissioned LCP Delta to support the development of an updated innovation strategy that would align the sector around common priorities and establish a longer-term vision for innovation through to 2050.

Building on more than a decade of innovation

The strategy was built on a strong foundation of existing innovation activity. Energy network companies had already delivered more than 2,600 innovation projects through programmes such as the Strategic Innovation Fund (SIF), Network Innovation Allowance (NIA) and predecessor funding mechanisms. These projects generated valuable learning and demonstrated the sector's commitment to innovation.

The challenge was no longer generating ideas. It was identifying where future innovation should be focused, ensuring initiatives delivered meaningful outcomes and creating clearer pathways from innovation to implementation.

Bringing the sector into the conversation

Developing a strategy for an entire industry required broad engagement across the energy sector.

LCP Delta worked closely with ENA, network operators and stakeholders from across the energy ecosystem to understand future innovation needs and priorities. Input was gathered through consultations, workshops and iterative feedback sessions involving more than 350 stakeholders, including network companies, policymakers, innovators, delivery partners and consumer representatives.

This collaborative approach ensured the strategy reflected both practical delivery experience and the changing needs of the wider energy system.

Turning evidence into shared priorities

Alongside stakeholder engagement, LCP Delta carried out a comprehensive review of innovation activity across the sector, assessing the performance of existing portfolios, funding mechanisms and delivery models.

The resulting strategy established a common framework built around:

• Three Ofgem-aligned innovation objectives
• Shared innovation principles
• Six priority innovation themes covering the most important challenges facing gas and electricity networks
• A clear focus on collaboration, deployment and consumer benefit

Rather than prescribing individual projects, the framework provides a consistent basis for directing innovation towards the areas where it can deliver the greatest impact for consumers and the energy system.

Looking ahead to the network needs of 2050

A key element of the work was the development of a long-term "Forward Look" for network innovation.

Published alongside the strategy, the Energy Innovation Atlas set out where innovation and system change are expected to be required as the UK progresses towards its decarbonisation ambitions. The framework helps network operators, innovators and policymakers understand how priorities may evolve over time and where future investment and collaboration are likely to be most valuable.

By connecting current innovation activity with future energy system milestones, the strategy supports longer-term planning around areas such as digitalisation, flexibility, resilience and whole-system integration.

Giving the sector a common roadmap

The 2024 Energy Networks Innovation Strategy provides the sector with a shared direction for innovation activity.

By combining evidence, stakeholder insight and long-term system thinking, the strategy helps network operators:

• Align innovation activity with strategic priorities
• Improve collaboration across organisations
• Focus investment on high-value opportunities
• Accelerate the transition from innovation to deployment
• Demonstrate value for consumers and the wider energy system

The work also highlighted the potential scale of innovation's contribution. Analysis referenced within the strategy identified opportunities for significant financial savings and carbon reductions through successful development and deployment of network innovation projects.