Public sector bodies in England can apply for a new round of funding to install low carbon heating and energy efficiency measures.

Up to £635 million of government funding will be made available through the Public Sector Decarbonisation Scheme (PSDS) with organisations such as NHS Trusts, schools and local authorities able to apply for grants from September 2022.

The PSDS first launched in 2020, to support the government’s aim of reducing emissions from public sector buildings by 75%, compared to 2017 levels, by 2037.

The new funding round is the second part of an overall £1.425 billion due to be allocated through the PSDS between 2022 and 2025.

Whole building approach

The PSDS promotes a ‘whole building’ approach to decarbonising heating – where all the factors that contribute to a building’s energy consumption are considered together. Applicants are encouraged to bundle energy efficiency measures (such as insulation) with heat decarbonisation measures (such as an air source heat pump), to reduce the overall size of the low carbon heating plant required.

Upgrades are already under way through earlier rounds of the scheme, with 734 grants awarded to public sector organisations across England so far. This includes Nottingham University Hospitals NHS Trust, which received more than £70 million to install water source heat pumps at Queens Medical Centre. Leeds City Council received £4.3 million to decarbonise primary schools and child day care centres.

The Public Sector Decarbonisation Scheme is delivered on behalf of the government by Salix Finance. Read more about Phase 3b of the PSDS on the Salix website.