New £20m Scottish Decarbonisation Fund - Details Announced

Wednesday 25 October 2023

Salix releases Guidance Notes for Scotland’s Public Sector Decarbonisation Fund

Guidance on how to apply for a new £20m Scottish decarbonisation fund has been released today.

Scotland’s Public Sector Heat Decarbonisation Fund will be delivered by Salix with funding available within this financial year. The scheme was announced by Scottish Government on Monday, July 10.

The fund is for projects to decarbonise their heating systems by replacing them with zero direct emissions systems as well as for retrofit energy efficiency measures supporting the overall decarbonisation of heat in buildings.

The capital funding aims to help Scotland meet net zero emissions of all greenhouse gases by 2045.

It has two objectives:

To support projects that will replace existing fossil fuel heating systems with zero direct emissions heating systems
To support energy efficiency projects where they can demonstrate that they are part of a whole building retrofit approach or broader strategy for heat decarbonisation (including connections to heat network).

Salix programme manager for Scotland Maisie Loggie said: “At Salix we are delighted to work with Scottish Government in delivering this crucial fund.

“There is a lot of work to do, and we are looking forward to receiving good quality applications when the portal opens in November.

“We will work closely alongside the public sector bodies throughout the decarbonisation journey and with our expert teams across Salix supporting the projects, we look forward to seeing the successful transition towards net zero.”

Today Salix has published the Guidance Notes, video, FAQs and other supporting material for the scheme. The Application Portal will open at the end of November and close at the beginning of December, giving eligible public sector organisations a chance to prepare applications.

Exact dates for the opening and closing of the Application Portal are still to be confirmed.

Under the funding scheme, organisations from arm's length external organisations, local authorities and universities can apply for funding to support the delivery of their heat decarbonisation and energy efficiency projects.

And applications will be assessed by Salix and their external contractors around the five following sections: Strategic Assessment, Technical Feasibility, Financial Feasibility, Project Deliverability, and Social Impact.

The fund supports the introduction of zero direct emissions heating systems, as well as encouraging a ‘whole building’ approach that implements energy efficiency measures to reduce a building’s overall energy demand.

Two types of application will be invited, Detailed Application and Concept Applications dependent on the stage of project development an applicant is at. All applications will undergo a quality-based assessment for full details of scheme criteria application and assessment process please see the Guidance Notes.

Fact file:

The Scottish Government’s Heat in Buildings Strategy, published in October 2021, focuses specifically on heating system change and sets out a number of actions to transform buildings to ensure that all buildings reach zero carbon emissions by 2045. To support the strategy, there is a commitment to invest £1.8 billion in funding over the Parliamentary term to 2026.
For the wider public sector, the Bute House Agreement seeks decarbonisation of these estates by 2038, seven years earlier than the 2045 target. To support this, the Programme for Government 2021-2022 committed to making £200 million of support available over the next five-year period to contribute to net zero and wider climate change targets.
Scotland’s Public Sector Heat Decarbonisation Fund (‘The Fund’) will provide up to £20 million to support heat and energy efficiency projects in buildings owned by eligible Scottish public sector bodies, to meet zero direct emissions heating (ZDEH) requirements in the future.
The scheme will help reduce direct fossil fuel emissions as well as make public buildings more comfortable.
The scheme enables organisations to think more strategically about their decarbonisation plans and identify which buildings are deemed as a priority across their estates.
Allocation of up to £20m of funding to public sector organisations to spent within financial year 2023/2024. Applicants will be able to apply for up to £2.5m worth of funding to be utilised across both the 23/24 and 24/25 financial years.

Notes to editors

What is Salix Finance?

Salix Finance is a Non-Departmental Public Body (NDPB). We help drive the transition to a low-carbon future by delivering and administering grant and loan funding on behalf of the Department for Energy Security and Net Zero, the Department for Education (DfE) and the Scottish and Welsh Governments. The schemes we manage finance energy efficiency and heat decarbonisation projects within public sector buildings in England, enabling the public sector to reduce carbon emissions in line with the UK Government’s commitment to become net zero by 2050.

Why Scotland’s Public Sector Heat Decarbonisation Fund is the fund important?

Decarbonising the way we heat our buildings has already been established as one of the biggest challenges in meeting the UK’s 2050 Net-Zero targets.

This scheme will provide capital funding for public sector organisations to carry out projects to decarbonise their heating systems and improve the overall energy performance of their buildings. In line with Scottish Government policy, applications should take a ‘whole building’ approach through the introduction of energy efficiency measures; to improve the energy efficiency of buildings as well as to ensure the optimal performance of their zero-direct emissions heating system.