Public Sector Low Carbon Skills Fund - DMA Group
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Public Sector Low Carbon Skills Fund Phase 4 Announced

On March 28th, the Government’s Department for Energy Security and Net Zero announced the details of a new grant scheme, Public Sector Low Carbon Skills Fund: Phase 4.  Grant funding of up to £17 million will be available through Phase 4 in the fiscal year 2023 to 2024. This funding is intended to assist eligible public sector organisations in acquiring specialist and expert advice to facilitate heat decarbonisation efforts throughout their estates.

The Purpose of Public Sector Low Carbon Skills Fund Phase 4.

One of the most significant obstacles to achieving the UK’s 2050 Net Zero objective is transitioning the heating of buildings to a low-carbon model. The majority of public sector buildings still depend on fossil fuel-based heating systems, necessitating the expertise to identify and plan for the replacement of these systems, preferably as they approach the end of their lifecycle.

By formulating a comprehensive heat decarbonisation strategy, organisations can gain a competitive edge in pursuing additional decarbonisation measures. This includes the capacity to construct detailed project proposals, which can be leveraged to seek future capital decarbonisation grants or alternative financing options. As a result, organisations can adopt a more strategic outlook and be better equipped to capitalise on upcoming decarbonisation prospects.

What role does Salix play in the Phase 4 Public Sector Low Carbon Skills Fund?

Salix is the delivery partner for Phase 4 Public Sector Low Carbon Skills Fund, and is a government-owned non-departmental public body responsible for managing funds allocated by the Department for Energy Security and Net Zero (previously known as the Department for Business, Energy, and Industrial Strategy), the Scottish and Welsh governments, and the Scottish Funding Council. Salix has utilised its experience in implementing Phases 1,2, and 3 of the Low Carbon Skills Fund to collaborate again with the government to develop the delivery model for Phase 4.

What’s new in Phase 4 of the Public Sector Low Carbon Skills Fund?

During earlier phases, funding was exclusively granted for the development of heat decarbonisation plans. However, in Phase 3, the option was introduced to conduct feasibility studies and detailed design work up to RIBA stage 4, along with creating a heat decarbonisation plan. Through the experience of executing the Public Sector Decarbonisation Scheme (PSDS), Salix has determined that completing detailed design work before accessing PSDS funding heightens the probability of successful project delivery.

It’s been identified that organisations are at different levels of development when accessing funding, and some may be prepared to undertake detailed design work without the need to revise their heat decarbonisation plan. Consequently, the policy is being revised for Phase 4 to allow for detailed design to qualify as a separate project in specific situations.

What are the three funding options in Phase 4?

  1. Option 1 is to create or enhance a heat decarbonisation plan that includes any requirements listed in the scheme criteria section.
  2. Option 2 is to create detailed designs that meet RIBA stage 31, as a separate project, but only if an up-to-date heat decarbonisation plan with the required information is already in existence. Evidence of an approved heat decarbonisation plan for the relevant site must be provided with the application.
  3. Option 3 is a mix of options 1 and 2, where an up-to-date heat decarbonisation plan with the necessary details is already in place to start creating detailed designs for a building, but there is also a need to enhance or create a heat decarbonisation plan for another building within the same estate.

By applying for standalone detailed designs when an up-to-date heat decarbonisation plan is already available, organisations can prepare themselves for an application to PSDS. However, the heat decarbonisation plan provided as evidence will be reviewed before the application is assessed. The plan must explain how the organisation will reduce greenhouse gas emissions by identifying and recommending solutions that lessen fossil fuel usage in public sector properties.

Additionally, the plan(s) must demonstrate that a comprehensive building approach has been implemented and must include relevant energy and spatial data and outputs from feasibility studies necessary for creating detailed designs. When verifying the suitability of the heat decarbonisation plan(s), it is recommended to refer to the Heat Decarbonisation Plan Guidance. If the evidence fails to meet these criteria, the application will not proceed to assessment.

What are the benefits of Public Sector Low Carbon Skills Fund Phase 4.

The initiative aims to achieve the UK’s 2050 Net Zero target by prioritising the decarbonisation of building heating systems, and therefore, the funding will enable organisations to develop a comprehensive and strategic approach in their project proposals for the next stages of their decarbonisation journey.

The scheme will help to mitigate the risk of a small number of high-value projects from depleting a significant portion of the available budget. This will aim to ensure fair and even distribution of funding across various grant values, with grant value caps being newly introduced as a policy change for Phase 4. The allocation of funding across value ranges is determined by an analysis of past demand for the Low Carbon Skills Fund.

The grant value caps that have been implemented are allocated across three grant value ranges. This includes an overall grant value cap of £1,000,000.

  • 34% of funding for projects up to £100,000.
  • 38% of funding for projects between £100,001-£500,000.
  • 28% of funding for projects between £500,001-£1,000,000.

The funding is designed to assist public sector organisations in engaging expert advice to develop heat decarbonisation plans, with a focus on improving energy efficiency and upgrading non-domestic building heating systems to low-carbon alternatives.

Funding Breakdown for Standalone Detailed Designs

Phase 4 Public Sector Low Carbon Skills Fund includes three funding options:

  • Funding to develop or improve a heat decarbonisation plan incorporating any output outlined in the scheme criteria section.
  • Develop standalone detailed design(s) from pre-existing heat decarbonisation plan(s).
  • A combination of options one and two above, to develop or improve a heat decarbonisation plan(s) and develop a standalone detailed design(s) from a pre-existing heat decarbonisation plan(s).

Specific activities that might be carried out include:

Desktop Analysis
This is an exercise where buildings details are input, producing heat loss calculations and an analysis of M&E plants energy usage.  Data is based on the information that the customer can provide electronically.

Building Audit / Site Survey
An energy audit over four stages:

  • Stage 1 – Obtaining building information.
  • Stage 2 – Review the consumption profile.
  • Stage 3 – Carry out site surveys.
  • Stage 4 – Provide the energy audit reports detailing the potential Energy Conservation Measures (ECMs).

Specialist Technical Site Survey
ECMs for items such as ground source heat pumps, BMS and building fabric where specialist supply chain partners may provide more detailed analysis.

Feasibility Studies
An assessment of the practicality of a proposed project plan or method. This is done by analysing technical, economic, legal, operational and time feasibility factors.

Investment Grade Proposals
An in-depth assessment and proposal phase, where following audits, solutions are further analysed to ensure that the savings and savings baseline are accurately calculated.

Detailed Design
Following the Investment Grade Proposals, the full detailed design will be carried out, detailing all ECM’s to be installed.

Who Can Apply for the Public Sector Low Carbon Skills Fund Phase 4?

  • Central government departments and their agencies
  • For central government departments where their roles are reserved (i.e. not devolved to Scottish, Welsh and Northern Irish Governments), including the Ministry of Justice and Ministry of Defence, funding may be used for estates located anywhere within the UK.
  • Emergency services.
  • Institutions of further and higher education.
  • Local authorities.
  • Schools within the state education system including maintained schools, academies, multi-academy trusts and free schools.
  • Nursery schools maintained by a local authority.
  • NHS Trusts and Foundation Trusts.

Key Dates

  • Application portal opens 26th April 2023
  • Decision/Outcome 14th July 2023
  • Completion of projects 28th March 2024

How can DMA Group Help Organisations Apply for the Public Sector Low Carbon Skills Fund Phase 4.

As part of DMA Energy Services, we can help you prepare you for the Public Sector Low Carbon Skills Fund Phase 4 through the following activities as outlined above:

  • Desktop analysis
  • Building audit / site survey
  • Specialist technical site survey
  • Feasibility studies
  • Investment grade proposals
  • Detailed design

We can also assist with the submission of forms to Salix, and the Public Sector Decarbonisation Scheme when ready, as well as manage, deliver, and maintain your decarbonisation projects.

“The Public Sector Low Carbon Skills fund is a step in the right direction towards achieving a low-carbon economy. By assisting public sector organisations in developing heat decarbonisation plans, we can make significant progress in improving energy efficiency and upgrading non-domestic building heating systems to low-carbon alternatives. This will not only help to reduce carbon emissions, but also create healthier and more sustainable environments for people to work and live in.” – Kevin Mcguane, Energy Services Director