£1.5 billion of government grants available for public decarbonization – ensuring a successful PSDS application
Tom Arnison - Design Engineer
22.02.2024
PSDS: Ensuring PSDSuccess
Decarbonisation is a challenge. Acknowledging this fact instead of brushing it under the carpet is one of the first steps in your decarbonisation journey. Questioning the status quo and years-old dogmatic “this is how we have always done it” approach is difficult but exciting; it opens up the opportunity to revolutionise and greatly improve the ways that things are done.
Retrofitting low-carbon heating systems is no exception, and whilst it can be involved, if done properly, can reduce energy bills, improve air quality and most importantly is the single greatest thing you can do to reduce a building’s carbon footprint.
To help organisations along this journey, the Public Sector Decarbonisation Scheme (PSDS), run by Salix, offers grant funding to public bodies to contribute towards the uplift in cost between a like-for-like fossil-fuel-fired heating plant and a low-carbon alternative – most commonly a heat pump. However, this funding is not easy to get your hands on. In the PSDS 3C round, £230m of grant funding is to be shared between £1.3b worth of applications.
Applications are assessed on a first-come-first-serve basis. However, poor-quality applications are filtered out at an early stage. Others found not to meet all requirements may then fail at the more rigorous technical assessment stage. After all of this, even if awarded funding, many projects end up giving the money back due to a lack of forethought for risks such as planning or DNO upgrade costs. Don’t let this put you off though, even if you aren’t successful in receiving funding, the process that you go through is invaluable for evaluating projects and if necessary, preparing for self-funding.
From the public organisation’s perspective, there are three key milestones in the project process:
the organisation successfully receives PSDS grant funding,
the new system is installed and enters operation,
the project operates with minimal issues and without greatly increasing utility bills.
A large part of passing the PSDS application process and achieving point 1 is convincing Salix you can deliver points 2 and 3.
Whilst it may seem daunting compiling all of the information together and knowing how to present this to Salix. By completing the application form thoroughly, you are showing due diligence in design decision-making, both reassuring Salix and also improving your chances of owning and operating a high-efficiency heat pump system. In the below article, I discuss a few of the key decisions that separate good heat pump projects from bad ones.
1. Understanding efficiency and choosing your system temperature
Heat pump efficiency is directly related to the flow temperature at which the system operates, reducing the temperature by replacing heat emitters will enable the system to operate efficiently however you will need to design the system to run at no more than 55°C to achieve cost parity with a gas boiler and in reality with an ASHP, it is more likely that this is only possible at 50 or 45°C flow temperature. Many people overstate heat pump efficiencies and are disappointed in practice. Heat pump manufacturers are the worst culprits of this as the metric they use to rate heat pump annual efficiency (SCOP) is based on annual heating profiles that are heavily weighted towards mild outside air temperatures and therefore over-predict annual efficiency. Improving efficiency will not impact your eligibility for grant funding but Salix do require you to have considered it and attempted to reduce flow temperatures.
2. High-temperature heat pump systems
Many believe that heat pumps cannot heat water up to the same temperatures as boilers however this is not the case. In cascade heat pump systems, where one heat pump feeds another heat pump in series, can heat water to 80°C and new models that can produce 70°C in a single stage are becoming more common. Before choosing one of these systems though it is imperative that you understand the implications on heat pump performance. Typically, an ASHP cascade system will produce water at 80°C with a SCOP of 2. If you have been told a number vastly different to this then ask for evidence. Although this may be the temperature that the existing boiler operates at, heating systems rarely need exactly 80°C. Spending a bit of time characterising the building and the heat emitters could save a lot in running costs and forms a vital part of any feasibility study.
3. Comparing ground source versus air source
As part of the application process, you need to demonstrate that you have conducted a feasibility study to identify what the appropriate heating system is. The big comparison here is ground source heat pumps (GSHPs) vs air source heat pumps (ASHPs). GSHPs are much more efficient than ASHPs, they have lower maintenance costs and are installed internally so present less of a visual or acoustic problem for planning and keeping your neighbours happy.
Many applicants and consultants are quick to state that a GSHP isn’t feasible due to the increased cost being prohibitive. Whilst this may be true at some sites, this is often used due to a lack of experience from that consultant. Don’t let this dissuade you from considering GSHPs unless there is compelling evidence to back that statement up. GSHPs do tend to cost more to install than ASHPs but that is not always the case. They are also eligible for 25% more grant funding from Salix and this will often cover the difference. The reduced running costs down the line and therefore building owner happiness are often worth the added investment. With a GSHP it is also possible to recover heat from any cooling system, further increasing heating efficiency whilst also providing free cooling.
4. Customising Control
Heat pumps are not boilers, and whilst you can replace a boiler with a heat pump, it should not be considered a like-for-like exercise with fit and forget mentality. As well as the physical modifications to the heating system such as replacing emitters, it is important to modify the control philosophy and mechanical control components such as pumps and valves to allow efficient operation. The following are recommendations for improving efficiency, however including the capacity to monitor and adjust the system is also extremely valuable and will allow fine-tuning of the control systems throughout the year.
Operate pumps at variable speed – It is paramount that circulation pumps are operated at variable speed to maintain healthy temperature differentials between flow and return connections to the heat pump. Not only does this help the heat pump but also pumping power is one of the most overlooked factors in poor system performance. Even in non-heat pump systems, replacing an old fixed-speed circulating pump for a high-efficiency variable-speed pump can provide a payback period of a couple of years in many cases.
Implementing weather compensation – Varying the temperature of the heating system with outside air temperature will ensure the heat pump only runs as hot as is needed and will mean it can operate far more efficiently.
Run at lower for longer – As with weather compensation, running the heat pump system at a low temperature for a longer period can vastly boost efficiency, it may even be worth experimenting with leaving the system on permanently depending on the building's use.
Although not all-encompassing, considering the above measures in a PSDS application will prove to Salix that the proposition has been thoroughly and appropriately evaluated. Finally, when submitting the application, consider the following tips to ease the process.
Ensure all of the supporting information matches up, this speeds up the assessment process and provides clarity and confidence to the assessor.
Provide evidence for your annual consumption (such as bills) and provide a description of how you have gone from that to the energy savings. This is a must-have for Salix so don’t delay in pulling it together.
Don’t fight the process, Salix and the technical assessors who support them are there to help you and they may ask challenging questions but they are just stress-testing your solution. You are not expected to have done a detailed design of the system and it’s ok to adapt your application as you go through the process based on their advice.