How the Public Sector Decarbonisation Scheme can support battery energy storage


The latest round of the Public Sector Decarbonisation Scheme is expected to open to applications this October. Phase 3b has an allocation of up to £635m over the years of 2023/ 2024 and 2024/2025.

The scheme, which has been funding public sector bodies since 2020, provides grants to support heat decarbonisation and energy efficiency measures.

Phase 3b has a specific focus on upgrading heating systems in public buildings and replacing them with cleaner, renewable energy systems. The funding also covers additional measures that can be used to support organisations to maximise their energy efficiency by including systems such as battery energy storage.

Battery energy storage has multiple roles to play in supporting in the upgrade of heating systems and can also help maximise any complimentary energy efficiency measures such as solar PV.

PSDS case study: battery energy storage

In the last round of PSDS, we worked closely with Cranfield University who received a £5 million grant. Their application was focused on the installation of a 1MW air source heat pump with the objective of decarbonising their heating system on campus.

The challenge of the new equipment however meant that they were significantly increasing their grid electrical demand on site – and consequently the carbon that they used. By including a solar array linked to a battery storage system, the University was able to run their air source heat pump using renewable energy with the battery system storing energy from the solar and providing the necessary power. This results in a whole business eco system which will help the University reduce their carbon.

Thinking of applying for PSDS?

If you are thinking of applying for PSDS and want to know more about how a battery energy storage system can benefit your bid, This email address is being protected from spambots. You need JavaScript enabled to view it.. We can undertake a free feasibility study to explore whether battery energy storage can provide long term carbon reduction benefits for your organisation and model how you can offset any additional equipment. 


Who can apply for PSDS?

This fund is available for the public sector only including:

  • 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
  • Nursery schools maintained by a local authority
  • NHS Trusts and Foundation Trusts


Applicants must:

  • have and be using a fossil-fuelled hearing system which is coming to the end of its life
  • Include at least one measure that decarbonises some, or all, of the heating systems in a building
  • complement the measure with a solution which will reduce the heat demand


What does the fund cover?

The fund is split into four categories.

  • Low carbon heating systems

The primary objective of this round of funding is focussed on the replacement of heating systems which can include a range of different solutions such as heat pumps, electric hearing and solar thermal.

  • Direct carbon saving measures

Such as building fabric upgrades and piping installation.

  • Indirect carbon saving measures

Including Solar PV, LED lighting and ventilation.

  • Enabling measures

This includes additional measures that can support any installed systems to save carbon. Battery energy storage is included in this category as it can be an essential component of a switch to new systems such as heat pumps or the additional of solar.