PSDS Phase 4: Guidance issued ahead of portal opening in October
Public Sector Decarbonisation Scheme Phase 4 will open for applications on 9 October, Salix has announced.
The long-awaited Public Sector Decarbonisation Scheme Phase 4 will open for applications on Wednesday 9 October, Salix has announced.
What is Public Sector Decarbonisation Scheme (PSDS)?
The Public Sector Decarbonisation Scheme provides grants for public sector bodies to fund heat decarbonisation and energy efficiency measures. This Department for Energy Security and Net Zero (DESNZ) scheme is managed by Salix.
What is on offer?
Through Phase 4, DESNZ will make capital funding available from 2025/26 to 2027/28. The value of available funding and the profile split across the three financial years will be confirmed in due course.
Who is eligible?
Public sector organisations in England, as well as organisations with sites in Northern Ireland, Scotland and Wales with reserved functions, are eligible for PSDS funding.
Generally, eligible organisations include:
- Central Government Departments and their arm’s length bodies (set out in Public Bodies as published by the Cabinet Office.
- Emergency services.
- Local authorities, including town and parish councils.
- Schools within the state education system, including maintained schools, academies, multi-academy trusts and free schools.
- Further education providers.
- Nursery schools maintained by a local authority.
- NHS trusts and foundation trusts (including NHS student accommodation).
What is different in Phase 4?
While in previous phases grants were awarded on a first come first served-basis, Phase 4 grants will be awarded through a targeted allocation process. Grant carbon cost will now be a key factor in determining which applications will be funded.
What is grant carbon cost?
An application’s grant carbon cost will be calculated by dividing the requested grant value by the direct carbon savings delivered by the measures that are funded only by the grant. Applications must have a grant carbon cost of no more than £510 per tonne of direct carbon saved over the lifetime of the measures (£510/tCO2e LT).
Applications with a lower grant carbon cost are more likely to receive funding. Although applications are initially prioritised by carbon cost, the order grants are awarded in will also be impacted by the sector (‘education’, ‘health’ and ‘other’) and annual funding profile.
Change in ‘public sector organisation’ definition
The definition of ‘public sector organisation’ has changed in Phase 4 to align with up-to-date legislation. Organisations must meet the definition of a ‘public authority’ as defined by the Procurement Act 2023. This may impact the eligibility of higher education institutions.
Heat network maps
To support Phase 4 applicants, DESNZ has published maps identifying where heat networks are expected to provide the lowest cost, low carbon heat to buildings.
These maps allow those considering applying for PSDS funding to make informed decisions about managing future heating costs and can be used to identify where heat networks exist and/or are highly likely to grow or be built.
What happens next?
According to Salix, the portal will open for applications on Wednesday 9 October at 2pm and close on 25 November 2024.
Applications will be assessed once the application portal closes. According to Salix, all successful applications will be awarded funding approximately by the end of May 2025. Projects must be delivered by 31 March 2028.
Where can I find more information?
More information about the PSDS Phase 4 eligibility requirements, along with the Guidance Notes, Application Form and other relevant materials are available on the Salix website.
How can Inspired help?
In the previous PSDS phases portal opening day meant waiting on the Salix website with your application and supporting materials at hand ready to submit on the dot.
Although the move to a targeted allocation process ends the need for speed, the new process underlines building a strong case for your grant carbon cost and overall need for funding.
If you would like to discuss how Inspired can support your application, please speak to your Account Manager, call 01772 689250 or email us at [email protected]
