Government ringfences £550m to decarbonise public buildings

The Government announced on Wednesday (15 May) that £557m will be made available to help improve the energy efficiency of buildings such as schools, universities and hospitals. The Government states that funding will support decarbonisation and help the nation hit its net-zero goal for 2050.

New projects confirmed to receive funding include the Royal United Hospitals Bath NHS Foundation Trust, which will install heat pumps, LED lighting, and insulation to improve energy efficiency. Loughborough University will replace gas-fired boilers with heat pumps to warm its swimming pool, and Surrey County Council will receive funding to decarbonise across 19 sites.

The Government estimates that decarbonising the public sector will save £650 annually by 2037.

Minister for Energy Efficiency and Green Finance Lord Callanan said: “From school corridors to the businesses that power up our economy, we want to make sure buildings of all shapes and sizes are supported to deliver net-zero.

“By allocating over £557m today, we are standing steadfast behind our public sector and local businesses, providing the help they need to make the switch to cleaner, homegrown energy. This will not only help cut bills in the long term, but ensure we keep reducing our emissions – having already led the world by halving them since 1990.”

The Government has dedicated funding access for public sector organisations through the Public Sector Decarbonisation Scheme (PSDS). It has provided more than £2bn to more than 1,000 organisations to date. Supported projects include upgrades to lighting systems and insulation; heat pump installations and onsite solar arrays.

The latest round of funding – totalling £230m – opened in October 2023 for spending for the 2024 and 2025 financial years.

The Government estimates that the PSDS will result in a 75% reduction in emissions from public sector buildings in England by 2037, against a 2017 baseline.

Business funding

At the start of the year, the Government unveiled the latest phase of its Industrial Energy Transformation Fund, pledging a further £185m to help businesses switch to clean energy sources and cut back on energy consumption.

The fund is designed to reward businesses with projects and initiatives that can help their operations run on clean energy by switching to renewables, replacing inefficient equipment and utilising electric solutions and hydrogen. The first 12 winners were announced in January.

Today, the Government has unveiled further grants, totalling, £27.5m from the Industrial Energy Transformation Fund.

Beneficiaries to the latest corporate funding include glass manufacturers Pilkington UK, Plastipak UK and Sodifel. The latter plans to replace its current natural gas steam boiler with one that can run on green hydrogen at its Leicester paper mill.

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