Here’s the key information you need to know.
What is the PSDS?
The PSDS is a grant programme designed to help public sector bodies fund projects aimed at heat decarbonisation and energy efficiency. The initiative is managed by Salix on behalf of the Department for Energy Security and Net Zero (DESNZ). It is part of the government’s strategy to reduce carbon emissions across the public sector.
What is the application timeline?
The application portal for PSDS Phase 4 opens Wednesday 9 October and will close on 25 November 2024. Successful applicants will be notified by May 2025, and all projects must be completed by 31 March 2028.
Although a move to a targeted allocation process (explained below) ends the urgent need for speed once the applications portal opens, the new process requires building a strong case for your funding need.
What is on offer in PSDS Phase 4?
Phase 4 of the scheme is offering capital funding, which will be made available across three financial years, from 2025/26 to 2027/28. The exact value of this funding will be announced later.
Does Phase 4 funding cover BMS/BEMS?
BMS and BEMS are not directly eligible. However, if the technology forms part of an application to decarbonise your organisation’s heat source, this wider application could be eligible.
Who is Eligible for PSDS Funding?
Public sector organisations in England, and those with reserved functions in Northern Ireland, Scotland, and Wales, are eligible to apply. This includes:
- Central government departments and their associated bodies.
- Emergency services.
- Local authorities, including town and parish councils.
- State-funded schools, such as maintained schools, academies, multi-academy trusts, and free schools.
- Further education providers.
- Nursery schools maintained by local authorities.
- NHS Trusts and Foundation Trusts, including student accommodation.
Key Changes in Phase 4
1. Targeted Allocation
Unlike previous phases, where funding was awarded on a first-come, first-served basis, Phase 4 will employ a targeted approach. This new process will prioritise applications based on a grant carbon cost model (see below).
2. Grant carbon cost
This new metric is key to Phase 4. It calculates the cost of carbon reduction by dividing the requested grant value by the direct carbon savings the project delivers. To be eligible, applications must not exceed a grant carbon cost of £510 per tonne of CO2 saved over the project’s lifetime.
3. ‘Public sector organisation’ - definition update
The definition of a ‘public sector organisation’ has been updated to align with the Procurement Act 2023.
4. Heat network maps
To help applicants, DESNZ has published heat network maps. These maps show where low-cost, low-carbon heat sources are available or expected to develop.
Where can I find more information?
You can access detailed information on eligibility, guidance notes, application forms, and more, visit the Salix website.
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