A Guide to the Public Sector Decarbonisation Scheme

October 15, 2020 | Guidance,

The New Grant Scheme

The UK Government Department for Business, Energy and Industrial Strategy (BEIS) has launched the £1bn Public Sector Decarbonisation Scheme (PSDS), combining the Capital Grant Scheme and the Public Sector Low Carbon Skills Fund. The scheme will provide the opportunity for public sector bodies in England to access funding for energy efficiency and heat decarbonisation projects within public sector non-domestic buildings. The funding will be delivered by Salix Finance.

Anthesis is encouraged to see UK government taking positive action on the decarbonisation of the public sector in this, the decisive decade. The announcement of these schemes is a real gamechanger for our public estate, with the potential to transform the carbon intensity and operational costs of our public buildings.

The focus on whole building retrofit and the decarbonisation of heat also has broader industry benefits in taking learnings to buildings outside of the public realm, something that we have been promoting for some time. We’re now working with our clients to take action – supporting them from project identification all the way through to implementation.

Our Energy Systems Team, comprising Chartered Engineers, Quantity Surveyors, and Energy Managers, bring the expertise and additional capacity needed to allow clients to maximise the opportunity from this funding.

key dates for the low carbon skills fund and capital grant scheme

About the available Grant Schemes

The PSDS aims to provide grant funding for heat decarbonsiation and energy efficiency measures across the public sector, non-departmental public bodies and central government departments. There are two funding pots available, including the Capital Grant Scheme and Low Carbon Skills Fund.

The Capital Grant Scheme

The Capital Grant Scheme offers £1bn of grant funding for capital energy efficiency and heat decarbonisation projects within public sector non-domestic buildings.
The scheme allows public sector bodies (PSBs) to apply for a grant to finance up to 100% of the costs of capital energy-saving projects that meet the scheme criteria.

The Low Carbon Skills Fund (LCSF)

The Public Sector Low Carbon Skills Fund will provide grants to help all eligible public sector bodies to source specialist and expert advice to identify and develop energy efficiency and low carbon heat upgrade projects, in preparation for application to the Capital Grant Scheme.

As part of the Low Carbon Skills Fund, there will also be an opportunity to apply for implementation funding to engage the expert skills required to deliver your project and to either put in place or improve your existing Heat Decarbonisation Plan.

Key Dates

Both the Capital Grants Scheme and Low Carbon Skills Fund opened for applications on 30th September 2020, however the closing dates depend on the type of organisation.

For the Capital Grant Scheme, public sector bodies that require funding to be transferred between departments must submit their applications by 9th November. The Scheme will then close for all applicants on 11th January 2021.

The LCSF has a shorter window for application, with the central government application date now over (30th October) and the final deadline for other public sector bodies being 4th December.

Who is Eligible?

  • Central government departments and non-departmental public bodies
  • For central government departments where their roles are reserved, funding may be used for estates located anywhere within the UK
  • Emergency services
  • Institutions of further and higher education
  • Local authorities
  • Maintained schools within the state education system
  • Nursery schools maintained by a local authority
  • NHS Trusts and Foundation Trusts
  • Non-departmental public bodies

For the grant scheme, a joint application can be made for more than one eligible public sector body.

PSDS Exclusions

  • Street lighting
  • Boiler upgrades without certain conditions explained in Category 4
  • Projects that will also utilise the renewable heat incentive (RHI)

Which Technologies are Eligible for the Public Sector Decarbonisation Scheme?

To be eligible for the Public Sector Decarbonisation Scheme, projects must also fit into one or more of the categories below:

  1. Technologies that directly contribute to the heat decarbonisation of a building by installation of a low carbon heating technology, e.g. heat pumps and connections to low carbon heat networks.
  2. Technologies that reduce overall energy demand, e.g. IT solutions, HVAC, hot water, insulation, controls, solar PV.
  3. Technologies that enable future heat decarbonisation projects to take place, e.g. metering, battery storage.
  4. Technologies that are used to replace coal or oil-fuelled heating systems and in Salix’s reasonable opinion it has been demonstrated that it is not viable for a low-carbon heating system to be installed, e.g. gas boiler replacement.

Projects in categories 1, 2 and 4 are subject to lifecycle carbon eligibility criteria of £500/tCO2e.

 

Important Considerations

  • Good governance of public money requires Salix to be diligent in ensuring that Public Sector Decarbonisation Scheme funding is spent for the purposes given.
  • The final Salix funding grant payment is provided on completion and a Completion Certificate being issued by the applicant.
  • Good project design will also give consideration to the future estate strategy and demonstrate that a range of options have been considered.

Our interpretation of the guidance is that clients need to take a holistic approach to the identification and implementation of projects to give confidence to the funder at each stage of the process.

This means that you will need to evidence:

  • Establishment of firm costs and calculated estimated savings
  • Reasonable project sequencing and due care to ensure no double counting of savings when considering multiple projects on the same site
  • Selection of suitable supplier(s) following procurement procedures
  • Details of an effective project management approach
  • Project progress through regular reporting
  • Post project completion activities including any verification of savings

The Process

Discover the process of applying and utilising the Capital Grant Scheme and Low Carbon Skills Fund and the support that we can offer:

Stage Our Support
   
Apply to the Low Carbon Skills Fund – Provision of cost estimates for project identification and heat decarbonisation plans
– Building physics and Dynamic Simulation Modelling (DSM)
 
Identify – ‘Investment grade’ energy audits up to RIBA stage 2
– Energy analytics and production modelling
 
Business Case – Technical and commercial due diligence
– Cost consultancy and CapEx schedules
– Procurement strategy
– Supplier engagement
 
Apply for capital – Risks and mitigation
– Monitoring and reporting plan
– Provision of evidence for grant application
 
Implement – Detailed design to RIBA Stage 3/4
– Client-side programme management
– Construction project management
 
Report – Contract administration and contractor management
– Risk Assessment, CDM and Health & Safety

How We Can Help

Anthesis has a long history of supporting the public sector to realise the challenge of estate decarbonisation.

In working on this latest iteration of public sector funding support, we are committed to providing:

  • Impartial advice – independent of contractor or manufacturer interest
  • Comprehensive coverage – Stakeholder Engagement, Quantity Surveying, Engineering and Project Management support allowing us to support clients through the journey from project identification to Operation & Maintenance
  • Competency – guiding our clients through the application process and managing risk

 

To support our public sector network to maximise the opportunity of this funding and the carbon saving potential that it offers, Anthesis hosted a series of webinars to share our expertise and experience. Click here to find out more and view the webinar recordings.

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