How to secure PSDS Phase 4 funding

00:00:01:17 - 00:00:14:05
Speaker 1
Hi and welcome to Veolias LinkedIn live. We can we welcome Andrew Whitworth with us today to introduce myself.

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Speaker 2
I'm Andrew Whitworth head of building energy services for Veolia UK. Just realize I've got very very purple background. Just not it's not completely intentional. It's the color scheme of the room.

00:00:25:21 - 00:00:54:07
Speaker 1
Hi. And I'm Lucy Stephenson. I'm the business development lead in Veolia South region, which is the region where we have developed many of these SDS projects. So yeah, LinkedIn live today we're going to talk about how to secure SDS first for funding SDS being public Sector decarbonization scheme. And as you've seen. Yep. You've got me and Andrew with you again today.

00:00:54:09 - 00:01:18:03
Speaker 1
So on the screen there you'll see a QR code. and we are live today. But this will be available to be viewed after. and there will be some more information. The slides are able to be downloaded if you scan that QR code. Also there is my direct email for anybody that would like to get in touch with some questions after they have had some time to digest the information.

00:01:18:03 - 00:01:25:15
Speaker 1
To do so, over to Andrew to discuss what is the SDS and what are the benefits.

00:01:25:17 - 00:01:47:05
Speaker 2
Thanks, Lucy. So SDS, another another acronym being thrown out there. So the public sector decarbonization scheme. So this follows on from the low carbon skills, one that Lucy and I talked about a few months ago. and this is now where we talked about low carbon skills funding and how that help developed heat colonization plans, how you can develop a strategy.

00:01:47:07 - 00:02:12:19
Speaker 2
This is then the bit where you talk about the the capital outlay. How do you actually deliver the project. So SDS was launched in 2020. it's been very, very successful, around 2.7 billion pounds worth of investment from the government. So the the whole premise of this is how the government can help public sector bodies decarbonize, so that schools, hospitals, local government buildings.

00:02:12:21 - 00:02:36:10
Speaker 2
How can they get to the net zero targets that have been set for just to rely on the capital budgets for these projects? it just won't work. The, the main, the main sort of, activity for whatever establishment is would would take precedence. so in 2024, early part of it, phase four of SDS was announced.

00:02:36:12 - 00:03:03:11
Speaker 2
So over a thousand projects have been done, but we now talking about the scheme extending to 2028 with phase funding of around 1.2 billion. and the critical part of this that that makes SDS quite special, especially when you look at it from, from a world wide, geographical landscape is effectively it gives the power to those individual bodies to, to do this.

00:03:03:12 - 00:03:27:06
Speaker 2
It's not, the government have set the targets for net zero, but it gives the the freedom for individual public bodies to do it in a way that that really helps them, and it achieves it in the way that they need to deliver it. as technology advances at an ever increasing rate, there's loads of different ways of doing this, and that can be very regionally specific.

00:03:27:12 - 00:03:54:01
Speaker 2
So whilst it puts a load on typically, you know, a director of a state, it also gives them the power to do it in the right direction for them. So the benefits of SDS, the biggest one is obviously reducing carbon emissions. So by transitioning to low carbon heating solutions and improving energy efficiency in buildings, the PSA directly contributes to reduction of greenhouse gas from those buildings.

00:03:54:03 - 00:04:21:15
Speaker 2
it's also the element of financial savings. And there's there's two aspects to this. So you've got the, long term savings of, changing energy supply, and that can be some sometimes there isn't a saving. For instance, if you've been on a very cheap source of energy for a long time, you transition into full electrification of your heating services and you don't secure onsite electrical generation.

00:04:21:18 - 00:04:48:20
Speaker 2
It can lead to increased costs. So there's got to be a balance in how that's approached, and enhance energy security. So by reducing the reliance on fossil fuels, you move more away from market fluctuations, like what happened, in 2022 with the Ukraine war. We saw rocketing gas prices, electricity prices, and then as we came to terms, are dealing with it, we saw stabilization.

00:04:48:22 - 00:05:18:04
Speaker 2
The more you generate on site, the more you, reduce your need for energy. You reduce the reliance upon it as well. improve building infrastructure. So upgrades and improvements is a really good example we'll touch on later where this has had quite a profound effect on the, on that public sector body. But overall, we look a lot of backlog maintenance for these types of facilities.

00:05:18:04 - 00:05:47:23
Speaker 2
And how long term is an energy upgrade project that also, can deliver fundamentally big upgrades for the site? That type takes a site further on. And like I said, we've got a really, really good example of that. we can also look at the education opportunities that this provides. So where new technology are implemented and the grant enables the newer technologies to be developed to provide practical examples.

00:05:48:00 - 00:06:19:20
Speaker 2
That gives overall, the industry more knowledge of what we're doing, more experience that then has a knock on and raises awareness for sustainability, for practices and technologies so that the whole of the UK and then finally job creation, the scheme stimulates growth in the green economy, creating job opportunities, creating almost like, like a microclimate of experts that can deliver those particular activities and really leads.

00:06:19:20 - 00:06:31:01
Speaker 2
And you know, how we can how we can push on and, and a whole industry based around this funding being released.

00:06:31:03 - 00:07:18:20
Speaker 1
So who is eligible? This is a public sector funding. So therefore you have NHS trusts Foundation trusts, local authorities, central government including major and Modi emergency services, higher education, schools within the state system, nurseries maintained by local authorities and eligibility is within England. So those outside of England aren't eligible for this specific funding. So in terms of the ineligible organizations, we obviously have private sector organizations and public corporations wouldn't be eligible for this registered charities and social housing organizations also aren't eligible for this because it's a public sector, fund.

00:07:18:20 - 00:07:45:09
Speaker 1
There are alternatives available if anybody's listening from those sectors that would, still be interested in decarbonization. So a little change here. some extra information. Universities whose revenue comes mostly from private funding and international student fees, eligible for this funding. So, if you are in the higher education university space, please do investigate this new criteria.

00:07:45:11 - 00:08:06:07
Speaker 1
And again that this is for inside of England only. The final point on this I'd like to make is in this blue font at the bottom in previous rounds we have seen a majority allocation in one specific sector or area in the in the public sector, and that has now shifted to create a more even spread across three areas.

00:08:06:07 - 00:08:32:09
Speaker 1
Those three areas are going to be health, education and other. So we will see an even spread across those three. So how to apply? So if you're sat there thinking, how do I go from listening to this LinkedIn live to accessing all of this money. This is a formal application process that will be online. It is a fairly comprehensive application form.

00:08:32:11 - 00:09:09:22
Speaker 1
and that must be submitted by a trust representative. You can gain support throughout that process, but it must be, submitted by a trust member. If I can give you one piece of advice today, and if you take away anything from this LinkedIn live, it is please go online. The the links there are in orange for you to access if you download these slides, but you can find them on the gov website or select the forms and the guidance available from previous rounds are available for you to review right now, so I highly advise going on there, getting familiar and reviewing the kind of content that will be request of you for this application.

00:09:09:24 - 00:09:37:16
Speaker 1
So then the other key point, the basis of all of this funding is the decommissioning of fossil fuel plants. So there must be some primary end of life fossil fuel plant that is decommissioned. To enable this project. The project must also take a whole building approach. It's one thing to look at where the heating source comes from, but we must also consider energy efficiency energy load from the building itself.

00:09:37:16 - 00:10:01:24
Speaker 1
We're talking about things like insulation, double glazing, LED lighting, whereas we can really reduce the energy demand on the facility. the next point I want to make is this is a detailed design that is needed. It's a comprehensive form. So there will be some feasibility and some investigation that is needed to build this application. And that's where the link in with the previous LCF funding comes in.

00:10:01:24 - 00:10:23:16
Speaker 1
But we'll we'll mention that a bit later. This funding does require trust contribution. You will be required to contribute 12% of the project value. There is a time frame. It's 1 or 2 year. and these are all this is all guidance we've seen from previous rounding, but with full, full release of the information for phase four is due imminently.

00:10:23:19 - 00:10:58:14
Speaker 1
For example, we saw three C, which was last year's round, released the full guidance on the 12th of July. So in the blue box there, if you come on over to the guidance in there, there is some changes between this round and previous rounds. The previous round was based on a first come, first serve basis, saying seeing the kind of the fastest application was awarded, whereas this time we're really focusing on CO2 savings and the the applicants will be awarded according to best value for money on the most direct CO2 savings.

00:10:58:14 - 00:11:23:11
Speaker 1
So we're awarding the best CO2 savings for investment. The other, change you've seen is there is additional emphasis on the importance of heat networks. So please consider heat networks in your application how that can be brought in. Next slide please. So there is different phases to the the project. We're talking about the application phase here. Building your application feasibility studies.

00:11:23:13 - 00:11:53:20
Speaker 1
developing that form ready to be submitted. you will then be successful or unsuccessful in funding. And Andrew will pick that up in a second. but if we carry on left to right, if successful funding is awarded, we then come through to procurement phase where we're really looking at the specifics of the customer of the project requirements, and your internal procurement or your framework provider will be really looking at the contractual side of this, and being suppliers and really getting ready for the design and build phase.

00:11:53:22 - 00:12:13:07
Speaker 1
We then come through to that construction phase, which is typically 1 to 2 year, technology. If of the design is procured, it's installed this is your construction phase. We then come through to the final phase, which is, arguably the most important. It's the longest phase where we're looking at 10 to 20 years of operation and maintenance.

00:12:13:09 - 00:12:32:13
Speaker 1
And in this phase is where you will achieve your carbon target. So this is a really crucial thing to consider right throughout. and the other point I'd like to make is we can support you on any one of these phases or all of these phases. So if there is a specific area you'd like to talk about, please do get in touch.

00:12:32:15 - 00:12:39:13
Speaker 1
And would you like to just briefly mention kind of if we, look at the planning alternatives, if you were successful on the funding.

00:12:39:15 - 00:13:08:23
Speaker 2
Yeah, sure. So whilst this is a is a great, mechanism to be able to get that grant funding and be able to, deliver these net zero projects, it's not always possible. and the targets, the targets are in place. And sometimes we do need to progress, as fast as we can. Sometimes those the particular way of doing things might not even be eligible to SDS.

00:13:09:00 - 00:13:33:11
Speaker 2
so there are other ways of going to, to market. Obviously the, the, and the most obvious is contribution from public sector bodies as a direct capital outlay. But those, freeing up that kind of budget, the opportunities are few and far between. there are, low interest loans that can be, that can be access.

00:13:33:13 - 00:13:55:07
Speaker 2
There's also the ability to get on board for external financing. And, and that's kind of a road to if you, you're in the right situation, the right type of project. You can look at off balance sheet types, arrangement, service contracts for delivery of energy over a long term. So there's lots and lots of ways of looking at it.

00:13:55:09 - 00:14:08:01
Speaker 2
SDS is great and should be the first port of call, but there shouldn't be a, a negative impact of, oh, if we might not get SDS, we shouldn't do anything. There's there's lots that can be done.

00:14:08:03 - 00:14:11:10
Speaker 1
Yeah. Thank you Andrew.

00:14:11:12 - 00:14:33:20
Speaker 2
so we just wanted to touch on a couple of examples where this has worked really well. So University Hospitals Birmingham NHS Foundation Trust, we've delivered two projects, them at good Hope hospital and Queen Elizabeth Hospital. The currently, good Hope is just coming to the end of construction now. And Queen Elizabeth, we've finished phase one, which is both now phase two.

00:14:33:22 - 00:15:02:19
Speaker 2
So essentially for both of these, the the main premise of the works was removal of steam system. So a conversion from steam delivery around site to low temperature hot water. And the benefits of that is twofold. You essentially you, you save the transmission losses for distributing at such a high temperature because essentially everything gets down to, 60, 70 degree circuits.

00:15:02:19 - 00:15:32:19
Speaker 2
Once you have problems. And the main system typically for anything below, up until, say, 1990 2000, was to use steam, in some cases, 2015. so there's a benefit to that. The secondary benefit is it enables you to access low carbon technology to generate the heat to heat pumps. So both these hospitals, take great benefit of, heat pumps that are on Cascade systems.

00:15:32:19 - 00:15:56:17
Speaker 2
So we use air source to then push into, water source heat pumps to deliver 80 to 90 degrees on site. And then we also look at installation. So both both hospitals ventilated. Queen Elizabeth had a solar array on the roof. And then around 5000, 5000 leading lights across the two sites. Skip on to the next one.

00:15:56:17 - 00:16:24:01
Speaker 2
This was the the interesting case study I was talking about at the beginning. So there's two elements. what we've done. The Eastbourne District General Hospital. The first, the first being the solar carport. so this is an interesting take on how you can utilize the space of a hospital in an effective way. So we're able to to squeeze in a 1.1MW right over the car park, and you can start to look at the additional benefits.

00:16:24:01 - 00:16:55:05
Speaker 2
A yes is there to generate electricity, but you can then, with LED lighting underneath you then reduce the light pollution from the area. You make it a more welcoming environment. Nice. There's lots more, benefits you can even get into talking about rain, more water harvesting. Although it's not something that was taken up on here. Just to the left, there was originally a video and just before this, just for this, we realized we can do the video, but there's an image there that that really, really shows what was done.

00:16:55:07 - 00:17:17:00
Speaker 2
So there was a massive sanitary upgrade at Eastbourne. and the primary purpose of this, was to essentially insulate the building more. The more insulated it is, the less heat you need to generate, the lower the carbon emissions. However, there was a knock on effect that this really had a dramatic impact to how, how the hospital looks.

00:17:17:00 - 00:17:41:16
Speaker 2
And if you check out our LinkedIn page, you can see the video and you can get a real feel for everything, that's going on there. But the impacts been quite dramatic. And you see on that video, the, the staff at Eastbourne have also commented on how it's a nicer place to work. It's a nicer building. It looks modern, it feels modern, and it's not something that we'd ever really considered for.

00:17:41:16 - 00:18:01:18
Speaker 2
We focused on the, environmental impact rather than the day to day human impact. So there's a there's a much greater, scope for what these projects can achieve beyond just what we talk about in terms of emissions. So yeah, have a have a look at that one. That's a great one to to see the video. And there's some good interviews on there as well.

00:18:01:20 - 00:18:26:08
Speaker 1
Yeah it is available on YouTube. If people do want to look at that and see the transitions before of the before and after. So yeah, so that's the content we wanted to cover today. to reiterate what I was saying at the start of the live, if you scan the QR code, you can download the slides, you can rewatch this live, and contact details are on there as well.

00:18:26:08 - 00:18:52:17
Speaker 1
If anybody has any questions or inquiries, want to digest the content. we did get some questions kind of sent through earlier before the LinkedIn live, and I think we addressed many of those throughout the content. but just to reiterate what they were. So we're really answering those for the people that sent them in. one was the alternative funding, Andrew, that you you did, an address nicely for us.

00:18:52:19 - 00:19:20:13
Speaker 1
The other one was about what's our advice, what's our next steps? And I think I reiterate, I reiterate what I said earlier, get online and look at the previously available funding forms, the guidance, the step by step guidance. there will be slight changes between three C and four, but there is a lot of content out there that you can review from three C to really start to understand what will be requested of you.

00:19:20:13 - 00:19:30:16
Speaker 1
So that is absolutely first steps for for me on on advice. Anything from you on drawing on what would be best advice from today and next steps for anybody watching.

00:19:30:18 - 00:20:06:02
Speaker 2
to to be prepared I think is it's not it's not something that you can suddenly decide, oh, it's been, you know. Yes, yes is launched tomorrow. Should we put something together for it really need to be prepared in the build up to it. Know what your plan is, what you're trying to achieve with it. and we see a lot of successful applications and then the, the successful delivery on the project of just going to pick up when you talked about, the four phases, and on the back end, it's really important to understand just how important that is.

00:20:06:02 - 00:20:43:20
Speaker 2
It can be easy to get caught up in, the delivery part, like the construction bit is the exciting bit. but that long term delivery, everything has a knock on effect. And I think that's probably the most important part to secure and how that then fits into your long term plan. and how that works. There's, there's plenty of frameworks out there, that you can reach out to if you prefer their initial involvement to be, to be almost like a third, a third party that, doesn't have the same interests like a contractor might do.

00:20:43:22 - 00:20:59:11
Speaker 2
reach out to us. We can recommend frameworks to to move forward with. There's a there's a lot that can be done. but yeah, I'd say engage early. If it's not something you've looked at already, just give us a call. We can we can talk it through. and point you in the right direction.

00:20:59:13 - 00:21:10:10
Speaker 1
Yeah. But it okay, so reiterate that. As Andrew said, please do reach out. Email on screen, scan the QR code. I think that's everything for us today. Thank you very much.