Funding to decarbonise

Competition for PSDS grants is fierce and schools need to prepare in advance, says Nigel Aylwin-Foster of ReEnergise, a consultancy that has supported successful grant applications in the past 18 months

The funding of low-carbon projects is arguably the biggest barrier to entry into renewables for schools and colleges. In fact, capital outlay can often make it simply out of the question. Yet schools are expected to become net zero by 2050 and some education groups have specific targets to reduce consumption and emissions by 2030, or earlier.

In 2020, the government began to set aside funding to support the decarbonisation of public buildings through the PSDS. The scheme provides grants to pay for decarbonisation works to existing energy infrastructure, converting fossil fuel heating plant to renewable alternatives. It also funds related energy efficiency measures.

Schools and colleges can apply for PSDS funding through Salix Finance, a public body sponsored by the Department for Business, Energy and Industrial Strategy. Local authorities, MATS and other eligible education groups can also apply on behalf of their schools.

The main focus now is on the phasing out of fossil fuel heating plant but the key requirement is that each application must demonstrate a ‘whole building’ approach to decarbonisation. In other words, in addition to seeking funding for heating plant conversions, Salix assessors will want to see the inclusion of related measures that will enable the new heating plant to work more effectively.

Funds are limited and each round of grants so far has been heavily oversubscribed. Salix allocates funding on a first come, first served basis, provided applications are technically and commercially compliant with their rules. This means that on the day the application portal opens, schools will find themselves in competition with hospitals, councils and others in the public sector to compete their online applications as quickly as possible before funds run out (often on the same day).

The latest phase (3b) of PSDS funding has just been announced, with £635million of grants available to spend in the financial years 2023/4 and 2024/5. The application portal will open in September, so keep an eye on the Salix website for updates on the exact date.

To be in with a chance of success, it’s vital to prepare your application ahead of time, so that you can quickly cut and paste your answers to each section into the online form. You will need technical details of your project, and ideally already have a full heat decarbonisation plan on which to base your application (although Salix will allow you to submit a final version of the plan at a later date). Your application will need details such as the expected cost of your project and the tonnes of carbon saved over its lifetime, a design concept, full details of the buildings in scope for conversion, and a credible procurement plan (including realistic project delivery dates). Indeed, the process is so complicated and time-consuming that schools often work with consultants like ReEnergise to prepare their applications in advance.

If you have an existing heat decarbonisation plan, or a saved application that was unsuccessful last time, then dust it off and be ready to secure your place in the queue as soon as the portal opens.

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A guide to developing an energy strategy within Rethink your energy strategy

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