BEIS INNOVATION PROGRAMME:GREEN DISTILLERIES

Up to £500k funding available to procure SBRI projects to develop fuel switching and fuel switch enabling technologies for distilleries in the UK.

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Today’s Agenda

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Item Subject Timing Who

1. Introduction and objectives of the session 10:00 Chris Windle

2. Overview and objectives of innovation funding 10:05 Mark Taylor

3. The Green Distilleries Competition, structure, SBRIs and eligibility

10:15 Chris Windle

4. Technology Scope, timeline and application process 10:25 Shak Choudhury

5. Coffee Break 10:45

6. General procurement procedure 11:00 Julie-Anne De Thomasis

7. Next steps / wrap up 11:10 Shak Choudhury

8. Final Q&A session 11:15 Chris Windle & Shak Choudhury

End 11:30

IntroductionObjectives of the session

• Introduce Energy Innovation at BEIS• Outline the Green Distilleries Competition• Explain how to apply and how the competition will work• Outline the next steps• Collect questions

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Energy Innovation Introduction

Dr Mark Taylor

Deputy Director for Energy Innovation - DeliveryScience and Innovation for Climate and EnergyBEIS

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HMG Strategies

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• Target of Net Zero by 2050 – in June 2019 the Government Committed to Net Zero by 2050

Energy Innovation Support Landscape –Organisation Overview

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BEIS(UK Energy Strategy &

Policy)

UKRI

Innovate UK

Energy System Catapult

Knowledge Transfer Network

Research Councils(EPSRC =

Energy Lead)

SICE (Science and Innovation

for Climate and Energy)

Devolved Administrations

Scottish Government

Welsh Government

Northern Ireland

Assembly

Other Government Departments

BEIS Energy Innovation Programme

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£180m Nuclear

Driving down costs and

building new UK supply chains and

skills

£15mRenewables

Driving down the cost of low carbon electricity at

scale

~103mIndustry &

CCUS

Low carbon options for industry, lowering

energy costs

£90m Built Environment

More cost effective energy

efficiency and low carbon

heating

£70m Smart Systems

Scaling up flexibility and looking for

new storage options

SICE Energy Innovation Programme - £505 millionAccelerating the commercialisation of innovative cheap, clean, and reliable energy technologies by the mid 2020s-2030s.

£50m Cross-CuttingSupportingdisruptive

innovations (particularly for

SMEs), inc.innovative

finance.

Hydrogen Supply

£33m

CCUS Innovation

£22m

Industrial Fuel Switching

£20m

IEEA

£10m

ACT CCUS

£13m

CCUDemo

£5m

Industry and CCUS competitions

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Industrial Fuel Switching (£20 million)• Aim: to stimulate early investment in fuel switching processes and technologies• Phase 1 – 1 market engagement study complete• Phase 2 – 7 feasibility studies complete• Phase 3 – 4 demonstration projects in delivery

• HyNet North West – fuel switching several key industrial processes from natural gas to hydrogen

• State-of-the-art fuel mix for UK cement production to test the path for net zero

• Alternative fuel switching technologies for the glass sector

• Hydrogen alternatives to natural gas for calcium lime manufacturing

Industry and CCUS competitions

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Industrial Energy Efficiency Accelerator (£10 million)• Aim: to increase the number of energy efficiency technologies available to industry to help reduce energy

consumption and cut carbon emissions• Phase 1 – 7 projects in delivery

• Including low carbon cements, energy storage, hygiene systems, steam boilers and water treatment• Phase 2 – 9 projects in delivery

• Including plastic manufacturing, waste processing, data centre cooling and water treatment

CCU Demonstration (£5 million)• Aim: to design and construct carbon capture and utilisation (CCU) demonstration projects.• Phase 1 feasibility – 14 feasibility studies complete• Phase 2 FEED – 2 studies complete• Phase 3a – 1 project in delivery (Tata Chemicals)

Industry and CCUS competitions

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• Green Distilleries Competition • Focusing on fuel switching and enabling technologies• Driving the UK towards achieving Net Zero• Providing leadership ahead of COP 26 (Nov 2021)• Seeking a flagship industry to lead and demonstrate Net Zero Solutions

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BEIS INNOVATION PROGRAMME:GREEN DISTILLERIES

Supporting Innovation – Green Distilleries

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The UK Distilleries industry has grown by

20% in 2019, with funding in low carbon innovation

this growth can be enhanced further. This competition focusses

on fuel switching with the aim to demonstrate, at

pilot scale, a range of fuel switching processes and enabling technologies.

The decarbonisation of distilleries has the

potential to cut almost 0.5 MtCO2e/y by 2050.

Committed up to £10m funding to

support distilleries going green up to

2023.

The technology must be applicable to the distillation sector,

including from maltings through to

maturation.

Distilleries Competition – Aims & Objectives

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Green Distilleries Objective: to identify, support and then develop credible fuel switching technologies/enabling technologies that can bring about a step change in their development.

Aims:

• To produce cost estimates for developing particular fuel switching and enabling technologies, whilst also identifying the market potential, cost reduction, energy use and carbon saving

• To demonstrate a range of innovative fuel switching and enabling technologies across the distillation industry

• To reduce the risks associated with fuel switching to lower carbon fuels.

Distilleries Competition – Aims & Objectives

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• To disseminate the findings from the demonstrations, increasing the confidence across a range of industry sectors that fuel switching is a credible solution to decarbonisation and increasing awareness in industry of the potential options.

• To improve BEIS understanding of the challenges and costs associated with decarbonising industry/providing low carbon fuel across the UK including in remote locations ; and provide more detailed, robust evidence about the likely extent of and potential for industrial fuel switching across the UK.

Distilleries Competition Phases

• The competition consists of two phases• The ITT and application form to be published 14th September 2020

are for Phase 1 (feasibility)• A separate ITT and application will be provided for Phase 2 – this

is only open to applicants who were successful in Phase 1 and who have completed the feasibility study

• We are planning to run Phase 2 in April/May 2021 subject to receiving applications of sufficient quality

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Distilleries Competition – Phase 1

Phase 1: Feasibility Study (£500k) – 7th December 2020 – 15th March 2021• Complete a feasibility study for novel Green Distilleries solution• Split into two Lots

Lot 1 (£300k): will focus on fuel switching of the process and onsite power production

Lot 2 (£200k): will focus on innovation around fuel switching enabling technologies such as fuel conversion, transport and storage

• Maximum £75k funding available per project• Projects to be completed by 15th March 2021

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Distilleries Competition – Phase 2

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Phase 2: Demonstration Study (£9m) – April/May 2021 – 31st March 2023• Complete a demonstration study enhanced by the feasibility study for novel

Green Distilleries solution

• Only those applicants who been successful for Phase 1 and have completed their feasibility studies can apply for Phase 2

• Maximum £3m funding available per project

• Projects to be completed by 31st March 2023

SBRI Procurement ProcessWhat is an SBRI?• Small Business Research Initiative;• Pre-commercial procurement – aimed at solutions which are not yet ready for the commercial market;

• Sharing of risks and benefits –suppliers receive financial support and retain arising IP (certain rights of use retained by BEIS). SBRI contracts are therefore expected to be priced below market rates, reflecting these benefits to the supplier;

Terms and Conditions• Suppliers retain the rights over any IP arising from the project;

• BEIS reserves the right to take up arising IP if it has not been commercially exploited by the supplier within 5 years of contract commencement.

• Phase 1 and Phase 2 projects will be signed under separate contracts• Standard public sector termination clauses will apply (including termination at convenience by either party

with 28 working days’ notice)• For Phase 1 only - Liability is limited to twice the contract value (Except in relation to death or personal injury)

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Distilleries Competition – Eligibility for Funding

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Item Subject Eligibility

1. Location Over 50% of the work must be carried out in the UK and led by a UK based company

2. Technology readiness level level at the start of the project 4 – 7

3. Retrospective work BEIS in unable to fund retrospective work on projects

4. Organisation type Includes both SMEs and large organisations; organisations from the public, private and third sectors; academic and research organisations may be consortium members but cannot be lead applicants

5. Additionality Evidence must be provided to show that innovation would not progress without public funding

6. Contract size Maximum funding requested must be £75k or below for Phase 1 and £3m or below for Phase 2. Private investment is also welcome.

Distilleries Competition – Eligibility for Funding

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Item Subject Eligibility

7. Eligible project costs Set out in Annex 2 of the ITT, projects requesting funding for commercialisation activities are not eligible. Funding only available for R&D activities.

8. Project end date Phase 1 final reports must be submitted before 15th March 2021Phase 2 demonstration studies must be completed by 31st March 2023

9. Risk benefit sharing Projects receive financial support and retain any intellectual property generated, with certain rights of use retained by BEIS. Project outputs are also expected to be shared widely and publicly and project teams are not permitted to include profit in the eligible project costs

10. Applicants and projects team make-up

An application must be submitted by a lead project member

Distilleries Competition – Technology Scope

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The range of technologies considered for innovation funding includes but is not limited to:

• Electrification - Novel high temperature heat pumps• Hydrogen - Both a blend and pure hydrogen are being considered, as well as hydrogen burners

for both directly fired distillation and for steam generation• Biomass and waste - Conversion and use of a range of biomass/waste products produced

across the distillation sector• Power generation – Utilisation of waste products (oils and biomass) for power generation,

hydrogen fuel cells (with a focus on production of both electricity and heat) and integration of local renewables

• Fuel Transportation and Storage – Liquid organic hydrogen carriers, hydrates and ammonia• Biomethane/Synthetic Methane – Only eligible for Lot 2

The focus of the competition is to provide the opportunity for the Distilleries sector to decarbonise

Distilleries Competition – Technology Exclusions

Exclusions: Funding will not be provided for projects where the technology development focuses on:

• CCS (Carbon Capture and Storage)

• Energy efficiency (apart from Heat Pumps which are in scope)

• Switching of feedstocks, (except where feedstock provides chemical energy to drive the process)

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Distilleries Competition – Phase 1 Timescales

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Application

• Publication of ITT - 14th September 2020• Mandatory Registration for Phase 1 Green Distilleries Competition - 12pm noon BST 2nd October 2020• Submit proposal by email to industry.innovation@beis.gov.uk by 12pm noon BST, 12th October 2020

Assessment

• Eligibility check and technical assessment and moderation - by 6th November 2020• Inform Applicants of the outcome of their application – 23rd November 2020

Contract award

• Contract award and projects start – 7th December 2020

Phase 1 Competition

• Feasibility study completed and submitted to BEIS monitoring officer for approval by 12pm noon GMT, 15th March 2021

Distilleries Competition – Phase 2 Timescales

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Application

• Publication of ITT - April 2021• Proposal for competition to be submitted - May 2021

Assessment

• Eligibility check and technical assessment and moderation - May/June 2021• Inform Applicants of the outcome of their application - June 2021

Contract award

• Contract award and projects start - June 2021

Phase 2 Competition

• All projects to be completed by 31st March 2023

Distilleries Competition – Application Process• Registration Email to industry.innovation@beis.gov.uk using the subject title Phase 1 – Green Distilleries

Registration [Lead Applicant Name] with a short summary of Green Distilleries solution – 12pm noon BST 2nd

October 2020 - You must register to be entered bid/application for the Phase 1 – Green Distilleries Competition.

• Confirmation email and provide you with a unique project reference number

• Submission of Proposal to industry.innovation@beis.gov.uk – 12pm noon BST 12th October 2020 using the subject title Phase 1 – Green Distilleries Submission [Unique Project Reference] - Completed application form, with any supporting documents and signed declarations

Further details will be provided in the ITT

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Distilleries Competition – Applicants• Lead organisations may only enter one bid into each lot as the project lead

• Consortium members/Subcontractors may be part of multiple bids, however it is the duty of the lead organisation to manage any arrangements with regards to conflict of interests with sub-contractors/consortium members where those sub-contractors/consortium members are part of other bids

• Bids from consortia are welcome. They may only enter one bid into each lot,all consortium partners are required to sign the completed application form.

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Distilleries Competition – Assessment Criteria

Criterions

1 Description of Novel Technology, Technical Feasibility and Performance of Green Distilleries solution

2 Development Plan, Carbon Saving and Dissemination

3 Project Financing

4 Project Delivery/Teams

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To be eligible for funding – Applicants must score 60% or higher in their application

Distilleries Competition - Review and Moderation

• All bids will be assessed and moderated internally with BEIS using third party external support for the assessment of the applications only

• Applicants that fail any part of the eligibility criteria will not be assessed further

• Feedback to applicants will be provided by 23rd November 2020

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Distilleries Competition - KPIs

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Ref. Performance Metric Phase 1 Phase 2

KPI 1 Number of Energy Innovation projects supported-completed X X

KPI 2 Number of projects that have successfully met objectives

X X

KPI 3 Number (and size) of Organisations supported to deliver project (Lead Partner and Other Organisations as named on grant offer/ contract) X X

KPI 4 Number of active Business Relationships and Collaborations supported (Formal and Informal, Overall and New)

X X

KPI 5 Advancement of Low Carbon Solutions-Technology Readiness Levels X

Ref. Performance Metric Phase 1 Phase 2

KPI 6i Initial Financial Leverage from private sector to deliver project

KPI 6ii Follow-on Funding to take project further forward XKPI 7i A. Reduced Unit Cost of energy- LCOE

B. Potential Reduced Unit Cost up to 2032KPI 7ii A. Increased Energy Efficiency/ Reduced Energy

DemandB. Potential Increased Energy Efficiency up to 2032

KPI 7iii A. Increased energy system flexibilityB. Potential Increased Energy System Flexibility up to 2032

X

KPI 8 Number of products (and services) sold in UK and Internationally

X

KPI 9 Potential reduction in CO2 emissions savings of project up to 2032

X

These KPIs will not be measure the success of the projects, but the success of the Green Distilleries Competition itself

We will be monitoring these KPIs throughout Phase 1 and Phase 2 for up to 5 years after the end of the competition

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BREAK

15 minutes

Dates for Distilleries Phase 1

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Proposed Tender Timeline Dates (may be subject to change)

Advert and full invitation to tender issued 14th September

Deadline for questions relating to the tender 25th September

Responses to questions published 2nd October

Deadline for receipt of tender 12 pm noon BST, 12th October

All suppliers alerted of outcome 23rd November

Contract award on signature by both parties 4th December

Contract start date 7th December

Dates for Distilleries Phase 2

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Proposed Tender Timeline Dates (may be subject to change)

Advert and full invitation to tender issued April 2021

Deadline for receipt of tender May 2021

All suppliers alerted of outcome June 2021

Contract award on signature by both parties June 2021

Project completed March 2023

Transparency

• In the interests of fairness, today’s information will be anonymised and shared with all bidders, including those unable to attend today.

• Includes Q&A from today and the supplier 1-2-1s (published in an anonymised form).

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Terms and conditions

• Although BEIS SBRI T&Cs are expected to form the basis of the contract, we will publish the final version of the T&Cs at the time of the ITT.

• They will be final and any bids submitted on condition that T&Cs are amended will be effectively submitting a non-compliant bid.

• If you have questions about the T&Cs you can ask them today or during the ITT Q&A window.

• All Q&A raised during the ITT publication period will be anonymised and shared with all bidders.

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Next Steps• The Q&A from this session will be published in the ITT

• Further Q&A received before 5pm BST 25th September will be published by 2nd October

• For those who consent, delegate name, email and organisation shared with attendees to aid networking.

• Mandatory registration to industry.innovation@beis.gov.uk using the subject title Phase 1 – Green Distilleries Registration [Lead Applicant Name] with a short summary of Green Distilleries solution – 12pm noon 2nd October

• Application submission to industry.innovation@beis.gov.uk using the subject title Phase 1 – Green Distilleries Submission [Unique Project Reference] with all required documents and signed agreements - 12pm noon BST 12th October

• Feedback to be provided by 23rd November

Note: dates are indicative

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