Phase 3b Public Sector Decarbonisation Scheme

The Phase 3b of the Public Sector Decarbonisation Scheme provides grants for public sector bodies to fund heat decarbonisation and energy efficiency measures. These grants are for capital works. Phase 3b will allocate up to £635m of funding to public sector organisations, to be spent in the financial years 2023/24 and 2024/25.

The grants are used to upgrade heating systems in public buildings to be cleaner, cheaper and powered by renewable energy. Following Phase 3a of the scheme some criteria changes have been made to sharpen the scheme focus on cost effective decarbonisation of heat and the overall achievement of carbon emission savings. 

Phase 3 of the Public Sector Decarbonisation Scheme was launched by Salix on behalf of the Department for Energy Security and Net Zero (formerly the Department for Business, Energy and Industrial Strategy) in 2021. It will provide £1.425bn of grant funding over the financial years 2022/2023 to 2024/2025, through multiple application windows for public sector bodies to fund heat decarbonisation and energy efficiency measures.  

The Phase 3b Public Sector Decarbonisation Scheme is the second round of this scheme. 
 
Client feedback from the previous phases have been carefully considered and refinements have been implemented to reflect stakeholder feedback regarding the proportion of funding made available for financing projects that deliver over more than one financial year.   
 
This scheme will help reduce fossil fuels as well as making public buildings more comfortable and efficient to warm. This is important as we know most of the buildings in the public sector still rely on burning fossil fuels for heating, hot water and catering.

Claiming grant funding for financial year 2023-24: The final opportunity for Phase 3b Public Sector Decarbonisation Scheme grant recipients to claim grant funding for financial year 2023-24 is fast approaching. Please see the Requesting final 2023-24 payment and Completing your project pages of our website for more details. We also encourage all grant recipients to attend our upcoming payment and completions webinars.

A list of the 171 projects funded through the latest round of Phase 3 funding, Phase 3b, can be found on the Phase 3 gov.uk page. This list will continue to be updated as applications continue to be assessed and the remaining Phase 3b funding allocated. Lists of projects funded through Phases 1, 2 and 3a can also be found on the scheme's gov.uk page.

The Department for Energy Security and Net Zero has published a summary report for Phase 3b Public Sector Decarbonisation Scheme.

The report highlights the policy drivers, scheme objectives, eligibility, timelines, and technologies as well as showcasing successful projects.

For Phase 3b, 560 applications were submitted with a combined value of over £1.48 billion. 231 projects were awarded funding being delivered by 183 public sector organisations.

Please see the link to gov.uk for the full report.

• Will help reduce fossil fuel emissions as well as making public buildings more comfortable and cheaper to warm.
• Allocation of up to £635m of funding to public sector organisations, to be spent in financial years 2023/24 and 2024/25. This is split by financial year, with up to £402m to be allocated for 2023/24 and up to £233m to be allocated for 2024/25.
• Applicants had the opportunity to submit separate applications for separate projects or combine several projects in a single application for a single year fund allocation or a multi-year fund allocation.
• Ongoing client and technical support on project delivery.