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Public Sector Decarbonisation Scheme – Phase 3: Everything you need to know

In 2019, the UK Government announced a commitment to reach net zero emissions by 2050. Since that announcement, the public sector has been at the forefront of their decarbonisation plans.

Heating is currently the largest source of emissions in the UK, accounting for 37%[1] of the overall carbon footprint. To help combat this, the Government is looking to prioritise tackling heat decarbonisation within the public sector.

As a result, the Department of Business Energy & Industrial Strategy (BEIS) announced the Public Sector Decarbonisation Scheme (PSDS), designed to help decarbonise buildings in the UK.

The PSDS scheme is being delivered by Salix and allows eligible organisations to apply for funds to cover the costs of implementing heat decarbonisation and energy-saving projects in non-domestic buildings. The scheme encourages green investment and supports the government’s net zero target and clean growth strategy.

Phase 3 of the Public Sector Decarbonisation Scheme (PSDS) was announced on 8th September and will open for applications from 2pm on Wednesday 6th October 2021, closing on Wednesday 3rd November 2021.

What will phase 3 cover?

Phase 3 of the PSDS will take a similar approach to Phase 2, with the main objective to support low carbon heating in public sector buildings, in addition to improving their energy efficiency.

Most buildings in the public sector still rely on fossil fuel-based heating. This phase will help fund low-carbon replacements specifically for heating systems approaching the end of their working lives and is a great opportunity to support public sector low carbon ambitions.

The scheme provides funds to replace ‘end-of-life’ fossil fuel systems (such as gas boilers), with low carbon heat sources, combined with additional energy efficiency measures to facilitate a ‘whole building’ approach to heat decarbonisation.

Who is eligible?

The scheme is open to a wide range of public sector bodies in England, Scotland, Wales and Northern Ireland, those eligible include:

  • Central government departments and their arm’s length bodies
  • 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

Phase 3 application process

The total amount of funding available for Phase 3 of the scheme will not be confirmed until after this year’s Spending Review.

Once the total Phase 3 PSDS budget is confirmed, 85% of the 2022/23 budget will be allocated to the single year projects where the heating system has reached the end of its working life, and the remaining 15% will be allocated to the first year of multi-year projects which must start in 2022/23 and end in either 2023/24 or 2023/25.

Organisations must clearly state whether they intend to apply for a single year project or a multi-year project at the application stage.

When do applications open?

The Phase 3 PSDS Application Portal will be available and accepting applications from Wednesday 6th October 2021.

The application form will be published at 2pm on Wednesday 15th September 2021 so speak to your consultant early to find out how best to prepare.

Applications close on Wednesday 3rd November 2021 at 2pm. Applications will be assessed and funding awarded to eligible projects in the order in which applications are received on the Salix Application Portal so it’s important to act fast. Successful applicants will be notified in 2022.

How Inspired Energy PLC can help

Inspired Energy PLC is the perfect partner to support you in your application for the Public Sector Decarbonisation Scheme with over 20 years’ experience supporting organisations like yours with their energy needs.

We’ve supported over 1,200 Public Sector organisations to manage and optimise their energy and to reduce their carbon footprint on their path to net zero.

We can determine your feasibility for this PSDS phase, support you through the application process, identify suitable technologies to benefit your organisation and manage the implementation and delivery of those projects.

If you’d like to speak to an energy expert about how we can help with your PSDS application, heat decarbonisation plans and more, call us on 01772 689 250 or email

[1] Source:

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