Phase 3c Public Sector Decarbonisation Scheme
Features to highlight
Sector soft caps
Following the successful impact of the soft sector caps in PSDS Phase 3b, the same caps will remain for Public Sector Decarbonisation Scheme Phase 3c. This will continue to support the fair allocation of funding across the public sector according to the distribution of carbon emissions across sub-sectors of the public sector.
Organisations have been grouped into three sectors: health, education, and other. These are defined further below.
Following previous stakeholder engagement and detailed data analysis, an upper limit to all sector caps is set at 35% of total scheme funding. Under this approach, and in line with the scheme’s first come first served principle, the maximum funding a sector can be allocated could be as high as 35% and no sector’s allocated funding should be lower than 30% of total Phase 3c funding.
These sector caps are ‘soft’, meaning that if insufficient eligible and complete applications within a particular sector result in that sector cap not being filled, any unallocated funding from within that sector cap will be allocated to other sectors – even if by doing so those other sectors exceed their sector caps.
Please see here to understand how the Department for Energy Security and Net Zero (the Department) has estimated the sector emission shares of the public sector.
How sector soft caps work
Applications will be assigned to one of the three sector categories:
a. Education - includes but is not limited to state primary schools, state secondary schools and universities and Local Authorities applying on behalf of schools only. Education owned leisure centre facilities would also be included in this sector.
b. Health - includes but is not limited to hospitals and health centres.
c. Other - includes but is not limited to emergency services and ambulance services, clubs and community centres, law courts and prisons, Ministry of Defence buildings, museums, and theatres. Applications which are mixed (e.g., a Local Authority application which covers a school and a leisure centre) will fall into the “other” sector.
Applications will be allocated on a first come first served basis to the appropriate sector pot until a sector cap is reached.
Upon the point a sector cap is reached, funding allocation for that sector will be paused until all applications for other sectors have been allocated up to their own sector cap.
If insufficient eligible and complete applications for any sector cap results in unallocated funding, applications which were initially paused will then be revisited to allocate the remaining funding on a first come first served basis to these projects, irrespective of their sector.
Hybrid heating systems
Phase 3c will not support hybrid heating systems where new fossil fuel boilers are being installed as part of the project. In addition, new boilers funded by the Applicant will specifically exclude a project from being eligible.
Hybrid systems are suitable for the Public Sector Decarbonisation Scheme when combining different low carbon heating systems, such as a heat pump, alongside an electric boiler.
The project is expected to meet the heat demand provided by the end-of-life system being replaced. For example, if the fossil fuel heating plant being replaced previously met the heat demand for the whole of Building A, then the new low carbon heating system, alongside the efficiency measures installed, should also meet the heat demand for the whole of Building A. In buildings with multiple fossil fuel heating plants, applicants are not required to replace units not at the end of their useful life.