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A golden opportunity: Public Sector Decarbonisation Scheme

Many parts of the public sector now have a golden, short term opportunity to ramp up their journey to net zero carbon .

7th October 2020

The recently announced Public Sector Decarbonisation Scheme provides grants for public sector bodies to fund energy efficiency and heat decarbonisation measures. The £1 billion scheme is part of the Chancellor’s ‘Plan for Jobs 2020’ commitment to support the UK’s economic recovery from COVID-19.

The hope is that it will support up to 30,000 skilled jobs in the low carbon and energy efficiency sectors. The intent of the scheme is to help make eligible buildings more energy efficient and install low carbon heating measures, e.g. insulation, glazing, heating controls, and heat pumps.

Act fast

The scheme opens on the 12th October with a very short window of opportunity to apply until 11th January next year. It is largely focused on those projects that have already been developed and are “oven-ready”  but have to date been unable to attract funding, due to the prevailing tightness of many public sector budgets. But the tight timescale will require a swiftness of approach that public sector organisations sometimes find challenging.

There is no minimum or maximum grant value and all applications will be reviewed on a case by case basis. The scheme is managed by Salix Finance; the body entrusted by Government to finance carbon reduction and energy efficiency across the public sector. The full guidance document for the scheme is here.

The new scheme is open to most of the public sector across; central government departments and their arm’s length bodies the emergency services; all levels of education institutions from nurseries to universities, local authorities and NHS Trusts.

What projects are eligible?

Eligible bodies can apply for up to 100% grant funding for projects which meet the compliance criteria of:

  • Taking place in buildings for which the applicant pays the energy bills and/or will benefit from any resulting savings.
  • The cost to save a tonne of carbon (CO₂e) over the lifetime of the project must be no more than £500.
  • The focus of the scheme is primarily for capital works, but consultancy fees may also be included. Further enabling costs may be eligible for the Low Carbon Skills Fund.
  • Reasonable enabling and ancillary works can also be included, provided they are directly linked to the core technologies being installed.

The technology criteria for the scheme seems to be equally straightforward and covers;

  • Those that directly contribute to the heat decarbonisation of a building by the installation of a low carbon heating technology. For example, heat pumps and connections to low carbon heat networks.
  • Also, those that do not directly contribute to the heat decarbonisation of a building but reduce overall energy demand and so will support future heat decarbonisation. For example, insulation, glazing, ventilation.
  • Technologies that do not reduce carbon emissions but enable future heat decarbonisation projects to take place – these technologies are exempt from the requirement to meet the £500/tCO2 lifetime criteria. For example, metering, electrical infrastructure, battery storage.
  • But technologies that are only permitted if they are used to replace coal-fuelled heating systems or oil-fuelled heating systems and if Salix’s assess that it is not viable for a low carbon heating system to be installed within the building as a replacement for the coal-fuelled heating or oil-fuelled heating system. For example, gas-fired CHP and gas boiler replacement projects would fit into this category provided they meet the above conditions.

Demonstrate additionality

Projects are also required to meet the criteria of being “additional”. They must not simply be measures that are a legal requirement, not intended for commercial gain (other than the reduction of energy costs) and that the project is not already underway, or funding already secured from another source.

Move fast

But all in all, this represents a great opportunity to deliver real positive decarbonisation change for those organisations that are swift of foot.

To find more about how Inenco can help you to identify appropriate schemes and support you through the application process contact us on 08451 46 36 26 or email