Public Sector Decarbonisation Scheme announcement
The latest funding round from a scheme to provide grants to public sector bodies to fund low-carbon heating, renewable energy and energy efficiency measures, has been announced.
Salix Finance has announced that HM Government has made available through Phase 3c of the Public Sector Decarbonisation Scheme, up to £230m for projects for financial year 2024/25 with additional budget for financial year 2025/26 provided to the scheme to enable projects to be delivered over two years.
Guidance documents, including Guidance Notes, Application Form, Applicant Journey and Privacy Notice, are now available for prospective applicants to download and complete before the Application Portal opens in autumn 2023.
The scheme provides grants to public sector bodies to fund low-carbon heating, renewable energy, and energy efficiency measures such as heat pumps, solar panels and insulation.
The announcement of Public Sector Decarbonisation Scheme Phase 3c coincides with the latest update on the total Phase 3b funding that has been committed. Phase 3b of the scheme opened on 12 October 2022 and closed to applications on 31 October 2022.
In March 2023, the Department for Energy Security and Net Zero announced the first tranche of grant recipients who had been successful in applying for funding through Phase 3b, awarding £409m to public sector bodies to decarbonise vital public buildings including schools, hospitals and community and leisure centres.
Since March, a further £181m has been allocated bringing the total for Phase 3b funding now allocated to £590m. 190 public bodies have been awarded funding to support 229 projects to install low-carbon heating alternatives and new energy efficiency measures. For a list of grant recipients see gov.uk
Many applicants for Phase 3b of the Public Sector Decarbonisation Scheme initially received funding from the Low Carbon Skills Fund (LCSF).
The Low Carbon Skills Fund has made £66m of grant funding available to public sector organisations since 2020 to secure the specialist support needed to design and deliver heat decarbonisation projects on their estates. This includes heat decarbonisation plans, detailed project designs and project development and delivery support. Many applicants have used these plans as the basis for their Public Sector Decarbonisation Scheme applications.
A total of £17m was made available through the latest round of Low Carbon Skills Funding, Phase 4, which opened to applications on 26 April 2023 and closed on 28 April 2023. The fund has now been allocated and a list of successful grant recipients will be made available shortly on gov.uk
The Public Sector Decarbonisation Scheme supports the Government's commitment to reduce emissions from public sector buildings by 75% by 2037, compared to 2017 levels, as first set out in the Government's 2021 Heat and Buildings Strategy.
The commitment follows significant progress the UK has already made towards reaching net zero - cutting emissions by 48% between 1990 and 2021, which is faster than any other G7 country.
Assistance to some public sector bodies in funding their projects is also available for the first time from the UK Infrastructure Bank as part of its mission to tackle net zero and support regional and local economic growth.
Applicants to Phase 3c of the PSDS eligible for a loan from the UK Infrastructure Bank will have the option of accessing the Bank's capital to borrow funds at preferential rates to support their decarbonisation projects. For more information visit www.ukib.org.uk/uk-infrastructure-bank-supports-public-sector-decarbonisation-scheme
Lord Callanan, Minister for Energy Efficiency and Green Finance, said:
"Achieving net zero means the public sector taking action too. The launch of application material for the next round of Public Sector Decarbonisation Scheme funding, Phase 3c, announced today will allow public sector bodies – from schools to NHS Trusts – to start designing their funding bids for ambitious decarbonisation plans that will ultimately save the taxpayer hundreds of millions while packing a punch on our ambitious and necessary climate goals."
Salix Finance Chief Executive Annie Shepperd OBE, said:
"Salix is once again delighted to deliver success for the Public Sector Decarbonisation Scheme. This is an incredible journey as we work across England delivering innovative and imaginative schemes and helping public sector organisations deliver projects.
"Through the Public Sector Decarbonisation Scheme, we are empowering organisations to make a real difference and meeting the challenges of reaching net zero.
"With each project we work with, we see how effectively government and public bodies can join forces to achieve results."
Some of the latest recipients of funding through Phase 3b of Public Sector Decarbonisation Scheme include:
Nottingham University Hospitals NHS Trust has been awarded over £40 million to install ground and air source heat pumps, double glazing and electrical infrastructure upgrades at the Queens Medical Centre in Nottingham. The project is expected to make direct carbon savings of 4,900 tonnes a year, or 124,300 tonnes over the lifetime of the project.
West Yorkshire Police has been awarded almost £3 million to connect Trafalgar House Police station in Bradford to the existing district heating network. Solar panels will be installed, and improvements will be made to hot water distribution and heating distribution pipework. The project is expected to make direct carbon savings of 300 tonnes a year, or 9,600 tonnes over the lifetime of the project. The University of Manchester is benefitting from over £2 million to decarbonise the Zochonis Building, which houses the Age and Cognitive Performance Research Centre. The existing gas heating system will be replaced with an air-source heat pump and solar panels will be installed. Roof insulation, dry wall lining, high-efficiency fans and new LED lighting will also be installed to improve the energy efficiency of the building. The project is expected to make direct carbon savings of 250 tonnes a year, or 6,800 tonnes over the lifetime of the project.
Reach2 Academy Trust in Burton has been awarded over £1 million to replace end of life fossil fuel heating systems with air-source heat pumps at four schools. The project is expected to make direct carbon savings of 150 tonnes a year, or 3,200 tonnes over the lifetime of the project.
Cranfield University in Bedfordshire has been awarded over £3 million to connect Mitchell Hall, the Cranfield Management Development Centre and the five Stringfellow Halls of Residence to the existing district heating network. Thermal stores and building energy management systems will also be installed at Mitchell Hall to improve the energy efficiency of the building. The project is expected to make direct carbon savings of 450 tonnes a year, or 11,300 tonnes over the lifetime of the project.
Rotherham Metropolitan Borough Council has been awarded over £3 million to decarbonise five buildings across their estate: Clifton Park Museum, the Civic Theatre, Town Hall, Orchard Centre Children's Centre and Riverside House. All buildings will be connected to the Rotherham heat network and solar panels will be installed at the Civic Centre and Clifton Park Museum. The project is expected to make direct carbon savings of 450 a year, or 13,400 tonnes over the lifetime of the project.
After the application process for each Public Sector Decarbonisation Scheme phase closes, a Summary Report is published which details application data, including value of applications, sectoral breakdowns and case studies. They are available to read here.
What is the Public Sector Decarbonisation Scheme?
The Public Sector Decarbonisation Scheme provides grants for public sector bodies to fund heat decarbonisation and energy efficiency measures.
Phase 3 of the scheme, providing £1.425bn of funding was launched in 2021 and Phase 3c will allocate the final element of the funding.
The scheme supports the aim of reducing emissions from public sector buildings by 75% by 2037, compared to a 2017 baseline, as set out in the Government Heat and Buildings Strategy and the Net Zero Strategy in October 2021.
Why is it important to decarbonise the public sector?
Decarbonising our country's buildings is essential if we are to meet our ambition of net zero carbon emissions by 2050.
To drive carbon emissions down, the UK government has set the world's most ambitious climate change target into law to reduce emissions by 78% by 2035 compared to 1990 levels.
By supporting the public sector to decarbonise its estate, we are supporting communities throughout the country by providing them with the greener, more sustainable buildings that will help their communities to thrive.
About Salix
The scheme is delivered by Salix Finance, a Department for Energy Security and Net Zero (DESNZ) non-departmental public body.
Salix helps drive the transition to a low-carbon future by delivering and administering grant and loan funding on behalf of the Department for Energy Security and Net Zero (DESNZ), the Department for Education (DfE) and the Scottish and Welsh Governments. The schemes we manage finance energy efficiency and heat decarbonisation projects within public sector buildings in England, enabling the public sector to reduce carbon emissions in line with the UK government's commitment to become net zero by 2050.
In 2023 Salix's role expanded beyond the public sector alone, becoming the delivery agent for Wave 2 of the Social Housing Decarbonisation Fund (SHDF) and Home Upgrade Scheme (HUG) schemes. These two schemes work across social rented homes (SHDF), and the homes of owner-occupiers and private tenants (HUG).
Media Contact
Hannah Walker hannah.walker@salixfinance.co.uk
07735 049 005
