Notice

IETF Phase 2 Summer 2022: questions raised with responses

Updated 20 September 2022

Applies to England, Northern Ireland and Wales

Previous and future competitions

Will there be future competition windows of the IETF and if so, when?

There will be two further Phase 2 competition windows in 2022:

• Summer 2022, May 2022 – September 2022
• Autumn 2022, October 2022 – January 2023

When will I know if I have been successful in the competition?

Please see the guidance for the current application window for details. Projects which are successful at the initial assessment stage will need to complete due diligence to BEIS’ satisfaction and agree to our proposed Grant Funding Agreement. Please be aware that you cannot make any claims for payment against costs incurred before you have signed a Grant Funding Agreement with BEIS. Any work undertaken before this is done at your own risk and BEIS does not have an obligation to pay for any costs incurred.

Where can I find out information about past IETF winners?

The outcomes from the first Phase 1 competition, Summer 2020 window, have been published. Further details about Phase 1 and Phase 2 winners will be published in due course.

Where can I find out information about other support?

If you have a question about the IETF that hasn’t been answered here, please contact us at IETF@energysecurity.gov.uk.

You can find up to date information on live BEIS funds on Gov.uk at the following links:

• Find funding to help your business become greener
  Summary of support available to deploy mature technologies
• Net Zero Innovation Portfolio
  Summary of support available to support innovation, research and development into low-carbon technologies and systems.

Restrictions on applications and resubmissions

Do I need to have applied to the previous competition windows to be eligible to apply for the next window?

No, you may apply for funding in any competition window regardless of if you have previously applied or not.

Do I need to create a new account for every application window?

If you have registered for any of the IETF Phase 2 competition windows, you do not need to register for a new account and can use the same login details. If you previously registered an account for Phase 1, which was delivered through Innovate UK portal, you will need to create a new account on the BEIS application portal.

Can I submit applications for future competition windows if I have already been successful in an earlier window?

Yes, there are no limits on the number of applications which you may submit, either as a lead applicant or as a project partner. You cannot, however, claim funding for the same set of eligible costs. The IETF will only award funding where it can be demonstrated that the grant requested by the applicant is directly needed for the costs of the study or deployment project undertaken. It is your responsibility to ensure these details are correct and are in line with the relevant Subsidy Control rules and regulations.

Can I resubmit an application in future funding windows if it was not successful in previous rounds?

Yes, you can resubmit applications. We advise that you reflect on the feedback you receive from assessors to improve your application. You may improve your chance of success if you make changes to your original application based on the assessor feedback you received. There is, however, no guarantee that your application will be successful; each application will be assessed on its own merit. Applicants should be aware that there have been changes to competition rules between Phase 1 and Phase 2, and there may be further refinements between future competition windows. For each application you submit, you must make sure that your business, project team (where applicable) and your project are eligible and the questions are answered in full.

Does a deployment project need to have had a study funded by the IETF to be eligible?

No, you do not need to have completed a feasibility or engineering study funded by the IETF in order to apply for a deployment project. In the deployment strands of the competition, you will be asked for significant detail in the application around the costs, benefits and risks of the project. It therefore may be beneficial to have completed a study (with or without IETF funding) prior to a deployment application.

Can I aggregate multiple projects into one application?

Within each strand of the competition, you may aggregate up to 5 separate proposals in one application. There are no limits on the number of applications you can submit. Further details on the specific rules for this are given in the applicant guidance Section 2.3. You are encouraged to read this before deciding whether or not to pursue this option.

Lead applicants and project partners

My organisation is a public body (university, council, school etc) am I eligible to lead an IETF application, or to be part of a project team?

The lead applicant on an IETF application must be a business which carries out an eligible industrial activity. Public sector organisations are not eligible to be lead applicants and sites such as schools, universities and public utilities do not fall under the IETF categorisation of eligible industrial sites. Public sector organisations are permitted to be part of a project team, details around the funding available for project partners is provided in Section 3.1.4 of the guidance and information about public sector organisations specifically can be found at Section 4.5.4.

As a consultant / technology provider can I lead an IETF application?

Technology providers are not eligible to apply as a lead applicant, even if you are applying on behalf of an eligible industrial site. In this case, the eligible site owner should be the lead applicant and the technology provider can be a project partner.

As a consultant / technology provider can I collaborate with an industrial partner on a project?

Yes, you can partner with an eligible industrial site who would be the lead applicant. As a project partner you can contribute to the application, carry out work related to the study or deployment project as part of the project team, and the costs you incur can be included as part of the total eligible costs. Alternatively, you may prefer to work with the lead applicant as a subcontractor, rather than a project partner, on the application.

As a consultant/technology provider or project partner, can I assist with writing the application for the lead applicant?

Yes, there is an option in the online application service for lead applicants to add project partners who can edit and jointly work on the application.

I am working with project partners; will we need to sign a collaboration agreement?

If your application is successful, and you are undertaking the project with project partners, you will be required to sign a collaboration agreement with your project partners. This will need to be in place before you can sign your Grant Funding Agreement with BEIS. If there are exceptional circumstances which means this cannot be achieved, BEIS will consider these on a case-by-case basis. In such exceptional circumstances, where explicitly agreed with BEIS, the collaboration agreement may be signed as soon as reasonably practicable, and in any event, no later than the first grant payment milestone. No payments against the grant will be made until the collaboration agreement is signed and provided to BEIS. BEIS reserves the right to review the collaboration agreement before issuing the Grant Funding Agreement to ensure it meets the necessary mandatory requirements. High level details of the requirements are included in section 6.6 of the guidance. You will be provided with further detail if you are successful.

When applying for multiple proposals that will be implemented by different teams, should we submit separate proposals or can we aggregate these together in one application?

In order to aggregate multiple proposals into one application they must all be carried out by the same project team. For the purpose of the application, the “same project team” means the same set of collaborating, named Project Partners. Project Partners are defined at the business or organisation level, rather than the specific people working within them. If the organisation is a named Project Partner in one proposal, but not in the other then we would expect these proposals to be entered as separate applications. We do not specify that the individuals within those organisations working on each proposal must be the same.

We impose this requirement to help mitigate the risk that confidential project data is shared with organisations who are not directly involved in a particular project, and to ensure that future due diligence processes and grant management can run smoothly. More details can be found in the guidance.

My company provides technology and finance solutions to eligible industrial sites; can we receive IETF support?

You may work with the eligible industrial site to develop an application and to deliver it as a project partner. IETF grant funding can be used towards the upfront costs incurred from either a study or deployment project, and the eligible industrial site will need to show that they can secure the remaining match funding. BEIS does not specify how this match funding needs to be secured, or on what terms it might be borrowed, and private financing arrangements are permitted. You must ensure that you and any project partners are content to work as a project team under the terms set out in the Grant Funding Agreement.

How is grant funding awarded when there are multiple project partners?

The lead applicant will be the signatory of the IETF Grant Funding Agreement which will specify the grant award, terms and conditions and payment milestones. BEIS will only make payments to the lead applicant, who will have responsibility for distributing funding to project partners based on the costs they have incurred over the relevant period. The terms of the collaboration agreement which you will need to ensure is in place between all project partners should provide a framework for this arrangement. BEIS will, in event of a dispute between partners, look for that dispute to be resolved within the terms of the collaboration agreement. Ultimately, the lead applicant is responsible for ensuring that the terms of the Grant Funding Agreement are complied with.

New sites, processes and networks

I want to set up a new industrial site and invest in the most energy efficient, low carbon technologies, am I eligible for IETF funding?

No, new build plants are out of scope for the IETF. Energy or emissions savings must be measured and take place at site level where there is an existing operational industrial process. This means that funding cannot be used to support capital delivery of new build plant, or to repurpose a site for a new industrial process.

I want to expand production on my site and install more efficient, low carbon equipment to deliver the capacity I need, am I eligible for IETF funding?

IETF funding cannot be used to cover costs directly associated with expanding production at a site. Any costs associated with refitting the site to cope with higher production would not fall in scope and should not be included within your application.

In some cases, this may require adjusting your eligible costs by using a reference investment. For example, if you want to replace a boiler with a more efficient version, which happens to also have a higher capacity then you should compare the costs to a like for like investment in a boiler with the same capacity, but which would not deliver the energy saving. The difference between the two costs would be the eligible cost. We will ask you questions to understand the total, and per unit energy or emissions savings that the investment will achieve.

Can IETF funding be used to support a proposal which spans an industrial park or multiple industrial sites owned by different companies?

No, the IETF is targeted at reducing energy and emissions at site level. Individual companies on an industrial park would be able to apply to the IETF for proposals on their own sites as the lead applicant and beneficiary of the grant. The industrial park, or any external organisation, would not be able to apply on their behalf. Proposals across sites owned by different companies may not be aggregated into one application.

Can IETF funding be used to set up a local heat network or to transfer waste heat from one site to another?

No, the IETF if targeted at reducing energy and emissions at site level. Recovered heat (or other waste energy) must be used in on-site industrial processes at the lead applicant’s site.

Early-stage technology proposals

Can we apply for studies that will explore which potential technologies will be most suitable for our processes?

No, an options analysis is not in scope. IETF funding can be used to support studies where the chosen technology solution has already been identified and you are exploring the effects and cost of deploying it within your industrial process. Support for industrial site level decarbonisation roadmaps has been made available through the Industry of Future Programme.

Can I apply with a technology solution which is currently lower than the required Technology Readiness Level (TRL) but is expected to rise to an eligible level during the span of the IETF?

All proposals must be at the eligible TRL level at the time of application. This is 8 and above for energy efficiency proposals (in the study and deployment strands) and 7 and above for deep decarbonisation proposals (in the study and deployment strands).

Can I apply with a project if most, but not all, elements of the application meet the required TRL?

IETF funding can only be claimed where the full scope of the proposal meets the TRL requirement.

Can I apply for support from the studies strand of the competition to develop a pilot or to demonstrate my technology solution?

No, the IETF is not an innovation fund and cannot be used to develop pilots. The IETF aims to support the commercial roll out and permanent installation of technologies at industrial sites, you may work with an eligible industrial partner to investigate the feasibility of deploying your technology at commercial scale within their process.

Eligible costs and grant payments

How much information on costs will I need to provide in my application?

You will need to demonstrate that you have a clear grasp of the costs of the project and be able to demonstrate that you are claiming an amount of grant that represents value for the public purse. You will be scored based on the strength of the evidence and justification for the stated costs and the need for the amount of grant support requested.

Information on costs will need to be entered into the finance form and submitted with your application. In the application form itself you will be asked to justify your costs and provide supporting evidence such as quotations from suppliers/subcontractors, letters of intent, or an explanation of the assumptions used for internal estimates of resourcing, capital and material costs.

How should I address cost uncertainties and long lead in times for finalising cost quotations?

The cost figures that you supply with your application, will be the costs on which your application is initially assessed. If your application is successful, and your cost figures have increased, you will need to cover the increase in costs. If your costs have reduced, we will adjust our grant funding accordingly. We recommend that you provide an estimate that is as accurate as possible and justify your cost estimates with evidence. Quotes, letters of intent and indicative costing may be appropriate evidence and this information will be reviewed by the IETF assessors.

Can I claim costs retrospectively for projects which have already started or will start before the application window closes?

No. The IETF cannot provide support for projects that have already started, been completed, or already have approval to start at a future date. BEIS has a duty to make sure it spends taxpayers’ money appropriately and in ways that deliver the maximum possible benefit to society. This means funding projects that deliver the greatest benefits, and not funding projects where some of the benefits would have occurred without government funding. You will need to provide evidence to prove this within your application. This evidence will be reviewed at assessment and due diligence stages of the competition. For further details please see section 4.2 (costs) and the assessment sections of the guidance.

Will the IETF provide support for ongoing costs (e.g., higher fuel bills) associated with a deployment project?

No. In the deployment strands of the competition the IETF will only support the upfront costs of investing in capital equipment. This does not include ongoing support for higher operational costs.

Can I claim grant funding towards the costs of staff time?

Yes, direct labour costs and subcontractor costs are eligible. Please see Section 4.1 of the applicant guidance..

I am looking to replace my existing equipment with new more efficient technology, can I get support for the whole cost of replacement?

Typically, the full costs of replacing an existing piece of equipment would not be eligible for IETF support. You must be able to show that the costs you are claiming will be directly related to achieving the energy efficiency benefit. This can be achieved by comparing the costs of your chosen technology solution against the costs of a like for like replacement of the existing equipment (that would not achieve the desired outcome). The difference between the costs of both investments identifies the energy efficiency-related cost and constitutes the eligible costs.

The use of a reference case removes costs that might otherwise be associated with the general maintenance and upkeep of the site’s productive capacity, expansion of capacity, or investment that might be needed to comply with current or future regulations.

If I am successful, what are the arrangements for claiming grant payments?

Costs are only eligible if they are incurred and paid by you between the project start and end dates as set out in your Grant Funding Agreement. All payments will be made quarterly in arrears on a disbursement basis, once you have defrayed the amount according to the profiles contained in your Grant Funding Agreement and have provided the required reports and evidence to support your claim. Once audits and reports are complete and approved, the claimed funds will be released to the lead applicant. You must provide evidence to support each claim made against the grant. Before the signature of the Grant Funding Agreement, BEIS will not be responsible for, nor make any commitment in respect of, costs incurred..

Why is the subsidy intensity amount lower for DD deployment projects that come within scope of Article 10 of the NI Protocol?

There are two legal bases for providing subsidies in the UK. In most cases, UK subsidies must comply with the subsidies chapter of the UK-EU Trade and Co-operation Agreement and in future the UK’s domestic subsidy regime. This is a principles-based approach to subsidy control which does not have maximum intervention rates for subsidy grantors and so based on market intelligence, the IETF decided that the maximum subsidy intensity offered for DD deployment is 85%. Rates can vary depending on company size and location.

Aid in scope of Article 10 of the Northern Ireland Protocol, needs to comply with EU State aid rules. For IETF the legal basis for granting aid is Article 36 of the General Block Exemption (GBER) which does have maximum intervention rates, which the Fund will need to comply with, alongside the other conditions of GBER, for aid to be granted legally. This means that aid for DD deployment projects in scope of Article 10 will attract a lower intervention rate.

Eligible technologies

Please read the IETF technology guidance, annex A, for further information. This FAQ document does not cover all eligible technologies.

I want to install solar panels on our factory, is this eligible for IETF support?

No, the costs of purchasing, installing, and maintaining renewable electricity generation equipment, such as solar panels, are not supported by the IETF. This is because the fund targets industrial process emissions and energy consumption, and other support is available for renewables. If you are using a renewable electricity source, for example to enable a switch away from a more carbon intensive fuel under the deep decarbonisation strand of the competition, then the benefits of using renewable electricity rather than grid electricity will be recognised.

Solar thermal technologies which provide direct heat to industrial processes, replacing an existing heat source would, however, be eligible.

Are geothermal technologies eligible for IETF support?

Yes, if the heat generated is being used within an eligible industrial process, replacing an existing heat source, then this would be eligible. Other heat pump technologies, where the heat is sourced from the natural environment or from waste process heat would also be eligible.

I want to install a heat pump to provide heat for an existing process, would this qualify as an energy efficiency or deep decarbonisation technology?

Where the deployment of a heat pump is facilitating a fuel switch to reduce process emissions, such as switching from a fossil fuel boiler to an electric heat pump, this would qualify as deep decarbonisation proposal. If, however, the primary outcome of a heat pump deployment is a reduction in energy consumption, such as using the heat pump to recover waste process heat or switching from less efficient electric heating, this would count as an energy efficiency proposal.

Are building efficiency upgrades such as insulation, roofing, space heating or lighting eligible for IETF funding?

No, IETF funding cannot be used for projects that upgrade systems in buildings that are not integral to the industrial process itself.

I would like to replace or upgrade an existing Combined Heat and Power (CHP) plant to help my site become more energy efficient, is this eligible for IETF funding?

The IETF will only support investment in CHP plants as part of the decarbonisation competition strand. CHP proposals must involve an eligible fuel switch.

New build or upgrades to CHP plants that do not involve an eligible fuel switch will not be in scope of the competition. Alternative financial incentives and government subsidies are available for CHP projects provided you seek accreditation with the CHP quality assurance (CHPQA) programme.

Under the scope of the IETF competition, can I install a new CHP on an existing industrial process to facilitate a fuel switch?

Yes, the IETF can support CHP proposals where there is an eligible fuel switch. CHP plants will be considered in scope, for either the study or deep decarbonisation strands of the competition, provided that at least 70% of both the heat output and electricity output produced by the CHP plant is used for an eligible industrial process.

I want to convert our existing fleet of vehicles (on and off-site) to operate using lower carbon fuels, is this eligible under the IETF?

No, the IETF does not cover transport measures.

I want to invest in hydrogen ready equipment, can I apply to the deep decarbonisation strand of the competition?

Projects aiming to install hydrogen ready equipment, but which do not have plans to switch to hydrogen fuel in the next 5 years are not eligible for the deep decarbonisation competition. Whilst this would be a positive investment, the IETF aims to support first movers to demonstrate decarbonisation technologies, reducing the associated costs and risks of rolling the technology out to other sites and delivering guaranteed emissions savings. Installation of hydrogen ready equipment, without a guaranteed fuel switch would unfortunately not meet this aim.

To meet the conditions of the decarbonisation deployment competition, you must show that the switch to the lower carbon fuel will occur once the equipment is operational, so that the emission saving begin immediately and can be monitored. There is a grace period of 5 years from project completion applied where companies intend to switch to hydrogen, this recognises that it may take time for your intended hydrogen source to come online. You must demonstrate a realistic plan to begin utilising your identified hydrogen supply within this time frame. Further details on the eligibility requirements are included in Annex A of the IETF guidance.

Can the IETF support hydrogen production projects?

All fuel production is out of scope for the IETF, so the costs of installing or carrying out a study to set up a hydrogen production plant would not be in scope for support.

Can the IETF support anaerobic digestion projects?

All fuel production is out of scope for the IETF, so the costs of installing or carrying out a study to install an anaerobic digestor (or similar plant) would not be in scope for support.

Can IETF funding be used to connect my site to the gas or electricity grid?

IETF support can be used to switch onsite equipment to lower carbon fuels. Any costs associated with off-site works are not eligible as part of the IETF, this includes the costs of gas pipework or electricity lines which would connect your site to the local or national grid network.

Project benefits

What units should I use in the project benefits calculator?

Please input all energy inputs in MWh. All direct emissions abatement should be inputted as tCO2e.

Do I need to account for changes in production in the project benefits calculator?

No. Please input your total pre and post intervention energy and/or emissions estimates. You will be asked to provide data on production levels pre and post intervention which will be used by BEIS in further value for money assessments. You do not need to make this adjustment yourself in the calculator.

How much detail do I need to provide in the application on the expected benefits of my proposal?

If you are applying to the deployment strands of the competition, then we would expect you to be able to quantify the benefits of the project in terms of the energy savings that can be achieved (in MWh) and/or the emissions savings that will be achieved (tCO2e). This information will be requested in the application form itself, where you will be asked to explain your workings and provide supporting evidence. You will also be asked to complete a Project Benefits Calculator, which is an excel tool which captures the quantified benefits of your project. We recognise that at this stage estimates may be subject to change and so we would ask you to be as accurate as possible and to outline any uncertainties around the estimates themselves.

In the studies strand of the competition, you will also be asked to provide an estimate of the potential benefits of your proposal, though less detail is required here as you will not need to complete a Project Benefits Calculator. We recognise that until you have completed the study the energy and/or emission savings may be difficult to assess, but you’d be expected to set out the case in the strongest terms you can.

How should uncertainties around fuel prices be addressed within my application?

You will be asked various questions in the application to explain the expected benefits and costs of the project, as well as how you have estimated the payback of the investment. To do this it will be necessary to provide information about the fuel prices that you have used within your estimates.

We do not prescribe the use of specific energy prices for your analysis, but we ask you to be transparent about the assumptions you have made and to note any uncertainties. In your supporting evidence it may be appropriate to provide a sensitivity analysis using different potential scenarios for your energy prices (for example, low, central, and high estimates). This might mean the different scenarios have different internal payback rates, some of which may meet your firm’s payback threshold. You will need to rationalise in your application why you believe the energy prices you have used are most appropriate for your site.