Earlier this year, the government confirmed a further £630 million investment for Phase 4 of the UK’s Public Sector Decarbonisation Scheme (PSDS), but what form will this investment take? The aim is to encourage the ramping up of cleaner, more sustainable energy systems in our public buildings. The scale of investment clearly demonstrates that the incumbent administration is getting serious about hitting net-zero targets, and what’s more, it puts heat pumps right at the heart of the national decarbonisation effort. Adveco considers what this all means and how successful it has been at making public building decarbonisation with heat pumps a real priority for the UK.
The Public Sector Decarbonisation Scheme: A Real Game Changer
The PSDS was created to support public sector organisations in cutting down on their carbon emissions and using less energy. To date, the sector has made more than 3,270 applications valued at more than £6.3 billion. Of these applications, 1221 have been granted with awards totalling £2.9 billion since Phase 1.
This latest £630 million is targeting a range of energy efficiency upgrades. From solar panels to better insulation, and, of course, a lot more heat pumps. The scheme is aimed at a wide range of public buildings – schools, hospitals, care homes, community centres, which combined together represent a not inconsiderable contributor to the nation’s carbon footprint.
This investment signals a continued drive to usher the public sector into a future based on low-carbon heating. It’s about moving away from those old fossil fuel systems. By offering financial inducement, the PSDS is trying to negate the initial, potentially high, cost barrier that often prevents public organisations, which constantly struggle with budget constraints adopting greener technology. It’s a proactive move, and important for making sure that public building decarbonisation with heat pumps becomes the norm, not just something a few places are able to embrace.
Heat Pumps: Taking Centre Stage?
Heat pumps are a central pillar of communication for the PSDS. Correctly deployed, they can be an efficient means of cutting carbon emissions from building operations. Unlike traditional, and still very popular, gas boilers, which burn fossil fuel to generate heat, heat pumps can extract thermal energy from the environment (whether it’s the air, ground, or water) into a building. This process still requires an energy input, in this case electricity, so while not a true renewable, they do at least represent a low-carbon technology able to release as much as four times the thermal energy compared to that required to operate. That said, air source heat pumps (ASHP), which are by far the most popular options still only one of over 30 different technologies which have received PSDS funding so far, and many new technologies are in development.
The PSDS is specifically pushing for replacing older gas boilers with heat pump technology, including air source, ground source, and even water source heat pumps. This direct swap is a key part of making public building decarbonisation with heat pumps happen quickly and effectively. Adoption has not been uniform but is now increasing following an initial high demand in Phase 1. Despite 848 projects incorporating ASHPs having been funded, PSDS-funded technology installations which incorporate ASHPs number just 345, and average just under £100,000 per project, so they account for a small part of the PSDS’ overall funding.
For public buildings, which often need a lot of heating and hot water, installing these ASHPs will help address the environmental impact a building has. Operational costs will increase when compared to equivalent gas systems they replace, as electricity continues to be more expensive. But for new builds, which do not have the option of new gas connections, the application of heat pumps will dramatically reduce direct-electric heating costs.
But this will have an impact, and many will not have considered or planned for subsequent, and not inconsiderable, increases in operational costs.
Adveco’s Part in Helping Public Sector Decarbonisation
As experts in commercial hot water and heating systems, we at Adveco are in a great position to help public sector organisations make the most of their funding, especially those seeking applications under the £1m mark. We offer a full range of heat pump products designed to be implemented to reduce emissions from energy-intensive water heating applications, which are often operationally critical. The ADV-W and ADVS-W air source heat pumps have been specifically developed for commercial applications. These systems can be put into brand new buildings or fitted into existing ones, giving you efficient and reliable hot water.
But it’s not just about the heat pump units themselves. Adveco also brings expertise in designing and putting together entire low-carbon hot water systems. This includes integrating thermal storage, which helps heat pumps work better by letting them run more consistently and store hot water for when it’s most needed. Focusing on the whole system design like this makes sure that the investment in public building decarbonisation with heat pumps really pays off in terms of efficiency and long-term sustainability.
The Wider Impact Of The Public Sector Decarbonisation Scheme
As well as being good for public sector buildings getting the upgrades, this investment is intended to send a really strong message to the whole market. By showing clear, continued government backing for heat pumps and other low-carbon technologies, the expectation is for the PSDS to encourage further innovation and growth in the low-carbon heating sector. This ‘upstream’ effect could lead to better heat pump technology, increased manufacturing here in the UK, and a more skilled workforce. All of which ultimately makes the technology more accessible. It must be said, however, that many in the industry question the government’s belief that this will also lead to notable decreases in unit costs, making heat pumps affordable. The technology used in heat pumps is not new; it uses the same production lines as the refrigerant industry, the global output of which dwarfs heat pump production. As such, the unit price point of components is unlikely to reduce; therefore, without considerable government subsidies, heat pump prices are unlikely to fall in line with the price of current gas water heaters. This is a real potential stumbling block for the PSDS later in this decade if prices do not fall as has been suggested.
As a route to decarbonisation, the capability of heat pumps to cut emissions is inarguable, and success stories that come out of these PSDS projects will hopefully inspire private sector organisations to jump on board too. As more public buildings show just how good decarbonisation with heat pumps can be, the hope is that it will be able to build necessary confidence and speed up the adoption of these technologies across the whole of the UK.
There are wrinkles in this vision, and the private sector will, for the most part, have its eye firmly on the bottom line. It will always react more favourably to the carrot rather than the stick. The PSDS investment shows the government can support this space, but the private sector continues to wait for similar levels of support. For many smaller businesses, the capital investment and operational costs just do not stack up, and that is a problem, as the ripple effect the PSDS aims to create is absolutely vital for the UK to hit its national net zero goals.
In the wider scheme of things, a £630 million investment is nothing compared to the billions needed to update and upgrade national energy infrastructure or replace aging systems across the commercial built estate. It’s a first volley in a complex and potentially protracted battle to win hearts and minds that is necessary to see the country embrace and achieve net zero by 2050. The government isn’t just changing public buildings; it’s attempting to kick-start a much bigger shift in how we think about energy. At Adveco, we can help that conversation at the board level; we can help organisations understand how they can best apply government funding or their own investments into their buildings to secure real carbon savings today. Critically, this can be achieved without the punishing capital investment which so often comes with it, and which can so often derail sustainability strategies before they have a chance of implementation. Whether planning to transition from gas to electric, or trying to achieve the best value from new build specification, talk to the experts first who can walk you through lower-carbon and renewable alternatives – from heat pumps to solar, electric and beyond…
