UK Government Invests Over £557 Million to Boost Energy Efficiency and Cut Carbon Emissions in Public Buildings and Businesses

The UK government is set to spend over half a billion pounds on enhancing energy efficiency and reducing carbon emissions in public buildings and businesses. This major investment of £557 million is for schools, hospitals, and leisure facilities in supporting the adoption of energy-efficient upgrades. This forms part of the UK government’s entire plan toward achieving its ambitious net zero targets sustainably. It will support the sector in the installation of heat pumps, solar panels, insulation, and low-energy lighting, thus cutting reliance on fossil fuels. This should boost the UK’s energy independence and save the taxpayer hundreds of millions of pounds. This comes as the UK has taken impressive strides in halving emissions, putting it right at the top among major economies in the fight against climate change. These efforts to decarbonize the public sector will help the public save an average of £650 million each year until 2037.

Lord Callanan, Minister for Energy Efficiency and Green Finance, said: “By providing over £557 million today, we are standing steadfast behind our public sector and local businesses, giving them the tools they need to go green and to cut their bills at the same time. This will not just help reduce bills in the long run but help us keep cutting our emissions – having already led the world by halving them since 1990.”

Since 2020, more than 1,000 projects have secured funding through the Public Sector Decarbonisation Scheme, meaning thousands of buildings have seen significant improvements in energy efficiency. Top projects in this phase include:

  • The Royal United Hospitals Bath NHS Foundation Trust will receive over £21 million to decarbonize three buildings through the installation of new heat pumps and other measures such as insulation, double glazing, and LED lighting.
  • Loughborough University will receive over £2 million for the decarbonization of its Olympic-sized swimming pool by replacing old gas-fired boilers with new heat pumps.
  • Over £5 million to be given to Surrey County Council in a bid to cut emissions from 19 sites that include libraries, nursing homes, community centres, fire stations, schools, and the council’s headquarters.

In addition to this, £27.5 million from the government’s Industrial Energy Transformation Fund will finance the support extended to businesses that consume a great deal of energy to help reduce their bills and their carbon emissions. New projects include:

  • Pilkington UK, which is consolidating its glass manufacturing into one factory and reducing carbon emissions by switching to a more efficient furnace.
  • Sofidel will replace its steam boiler—operating on natural gas—with one that is capable of running on green hydrogen, at its Leicester paper mill.
  • Plastipak UK will upgrade 13 drying systems at its Wrexham plant to save energy in producing food and beverage containers.

The projects reflect government spending of more than £12 billion on energy efficiency by the year 2028, which will provide cleaner and more secure energy for organizations and businesses. Emma Clancy, Chief Executive, Salix said: “The climate crisis is one of the greatest challenges of our time. The Public Sector Decarbonisation Scheme enables the public sector to tap into a fund which can transform our public buildings. These are the sites we use every day; our schools, universities, leisure centres, and others will become more energy efficient as well as being comfortable places to use thanks to this funding.”

Cara Charles-Barks, Chief Executive, Royal United Hospitals Bath NHS Foundation Trust said: “This grant is invaluable. It will enable us to make essential changes in the coming years and will have a positive impact on the environment and the experience of being in hospital.”

Neil Syder, Pilkington UK Managing Director said: “This project represents one of the single biggest investments we’ve made in our UK manufacturing facilities in decades and will ultimately secure the future of rolled glass manufacturing in the UK.”

Public Sector Decarbonisation Scheme: The Public Sector Decarbonisation Scheme is managed by Salix Finance on behalf of the Department for Energy Security and Net Zero and has so far committed a share of £530 million from its third tranche, Phase 3c, to 222 projects. In the coming weeks, further funding will be committed when the final awards are announced. 19 projects have been awarded a share of £27.5 million from the Industrial Energy Transformation Fund, matched by £69.7 million in private and public sector co-funding.