£75m Phase 2 PSDS
Phase 2 of the PSDS scheme has been announced, with £75m ready to be dished out to those who are carbon hungry and quick off the mark, with applications accepted from April 7th 2021. Following on from the initial £1bn where Salix approved projects totalling ‘only’ £932million, this is your chance to is enjoy the leftover sum, revamped and presented as an incredibly appetising dish.
The purpose of the Public Sector Decarbonisation Scheme (PSDS, for short) is to fund efforts towards improving energy efficiency and heat decarbonisation in Public Sector buildings.
It all sounds too good to be true, right? We are not going to suggest the process is a walk in the park as there are a few hoops and hurdles to jump that may seem daunting at first. With our support, it is an easily accessible pot of money we can build into a proposal for you or your public sector client.
We’ve detailed all you need to know about what’s different this time, in a quick guide to give you confidence to move forwards with your application to the Phase 2 PSDS. If you are thinking about this scheme and wondering whether it’s applicable, don’t delay as application will be assessed on a first come, first served basis. Best start the conversation now if you or your client see an opportunity.
What’s the motive?
The government’s main ambition of the Phase 2 PSDS is tackling emissions from heat – which is responsible for over 50% of the world’s total energy demand. The process to decarbonise heat is still fairly immature compared to its more popular counterparts, like electrifying cars, but we see more and more heads turning to decarbonisation of heat as technology like Virtu has made it a viable option. The first phase of the Grant Scheme was announced last year to support the Chancellor’s ‘Plan for Jobs’, helping the UK’s economic recovery from COVID-19. It’s hoped it will boost green jobs, as well as supporting the government’s 2050 net zero goals by cutting emissions in the public sector. The Phase 2 funding was announced in March 2021, so approved funded projects will need to be complete by March 2022.
Who’s it for?
The scheme is only for public sector bodies, so if you work for, or are acting on behalf of, a client within a central government department or non-departmental public body delivering public services, a local authority, emergency services, a maintained or academy school, nursey school maintained by local authority, an institute of further or higher education, or within the NHS trust or Foundation Trust – their project will be eligible for a slice of PSDS funding.
What’s different from Phase 1?
Everything, really! This £75m portion is significantly different from Phase 1. So don’t confuse the application process and resubmit your bid, just yet
Phase 2 is more focused on decarbonisation of heat. If you are interested in this fund, your project must include the decarbonisation of heating within a building, either partly or entirely, which is achievable alongside Virtu technology
The fund only covers the added cost of implementing a low carbon solution. So that’s the extra cost needed over cost of the existing system direct replacement, which must be fossil fuel based and coming to the end of its life
The project cost is capped to £5million per application
The Carbon Cost Threshold (CCT) has been reduced from £500 to £325/tCO2eLT and only applies to traded carbon, meaning conventional PV will not be well supported this time.
What has stayed the same?
The appropriate decarbonisation technologies will be 100% grant funded
The funding is for the only available to the Public Sector
The funding still applies to heat decarbonisation heat technologies integrated with other solutions like solar PV, which is not supported
The project must not have already started.
What projects can be funded?
Information on included and excluded technologies can be found on the Salix website, but the focus is on heat decarbonisation technologies such as Virtu, that can also be combined with supporting technologies such as heat pumps within this scheme.
The funding covers a lot of other aspects too, like projects that reduce demand for space heating (insulation and controls for instance), but we’ll stick to what we know best, renewables and solar thermal hot water. It’s a no-brainer and a golden ticket in the process as we know the government are particularly favourable to applications of this nature.
How do I apply?
The scheme will run until the money runs out, so best to get in early with applications. You can apply by visiting the Phase 2 PSDS webpage here
Public Sector benefits
Apart from the ‘free money’ part, there’s the obvious future-proofing of your building too. It’s worth noting that UK heat demand during winter months is 3 times the size of our electrical supply, so shifting to electrification of heat will burden the grid and will not suffice in the long term. Switching to a renewable energy system supports the government’s net zero targets whilst reducing you reliance on the grid, minimising the risks of uncertain volatile energy energy prices.
Energy consultant benefits
As an energy consultant, you can demonstrate to your clients the most innovative solar thermal technology that delivers the most effective return for their project. It is a great opportunity to deliver great impact!
In addition, we’ll give you the opportunity to learn more on solar thermal applications, uses and requirements, with our experienced team on hand to support you in the familiar government funding process. We are building our network of consultants and trusted advisors so would be very interested to work with you.
Installing Virtu technology can be funded entirely by the scheme, giving you the opportunity to assist your client in achieving significant financial and carbon savings and leading in providing the most innovative solutions, against other providers of more conventional methods.
Virtu solar thermal and hybrid PVT technology can also reduce operating costs. When integrated in a larger system, will contribute heavily towards your client’s decarbonisation targets. Plus, Virtu is leading the market in advanced innovative technology which demonstrates willingness to change and take action on lowering carbon emissions, having the opportunity to be some of the first organisations to adopt this innovative technology.
What next?
The application process has a 3-week turnaround, but as experience of the previous process tell us, applications are expected to be high so this could be extended. We advise you to start your application as soon as possible. Submissions are open from 7th April 2021 and we are expecting the pot to empty really quickly.
Are the below points accurate to your situation?
A Public Sector building with a fossil-based heating system at the end of its useful life
You were looking to replace the old system in the next year
You have the funds available to renew the old system with a like-for-like replacement.
If so, please get in touch to understand more about Virtu technology and how it can decarbonise your heat demand or for support with your application
The results of the PSDS Phase 1 makes interesting reading in the meantime. Take a look here. Nearly 90% of the total fund was allocated to Local Authorities and NHS.
We are excited to see some of our customers names on the list and hearing the good news for their Phase 1 funding. We are really look forward to getting Virtu on more rooftops in the UK, reducing carbon emissions in the built environment.