5. Energy

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Energy - PAN Government Project

The OGC in conjunction with IEWM are now delivering collaborative and compliant contracts in to local authorities and providing the following enhancements:

1. The opportunity to purchase energy at wholesale markets rates (2% average price improvement)

2. The advantage of joining large scale collobrative contracts via validated Professional Buying Organisations (PBO's) - 5% average price improvement.

3. The benefit of flexible priced arrangements that reflect market day rates, rather than an averaged price that is generally more expensive overall, which is a 3% average improvement.

PAN Government Energy Project

Transforming government energy procurement –

buy smarter, use less In January 2007 HM Treasury announced Transforming Government Procurement, an initiative to review government spending. In response to this the OGC launched the pan government Energy Project in April 2007, sponsored by the Ministry of Defence, to review public sector energy usage and procurement with the aim of delivering both cost and carbon savings.

Energy spend across the public sector is approximately £3.25bn per annum, with in excess of 250 OJEUs being issued over a two year period. The Project has developed a series of recommendations for improving energy procurement and management.

These recommendations:

Provide for a managed approach to sustainable energy procurement. Are designed to save public sector organisations money and carbon, thereby helping to meet CSR07 commitments and improve corporate social responsibility.

The recommendations have been developed by a collaborative governance structure, with energy expertise and representation covering 60% of the public sector energy spend. These initiatives have been estimated to deliver £300m annual savings by 2010/11, while meeting customer needs for choice and improving the ability of all public sector organisations to achieve sustainability targets.

Further information on the PAN Government Energy Project

OGC - Energy Information

OGC - Sustainability Initiatives 2008

Useful Documents

RIEP and OGC energy partnership saves local authorities over £100 million in energy costs

With the government announcing cuts of up to £6.2b in the current financial year the need to reduce public sector spending in key category areas is vitally important. The Pan Government Energy Project represents a real opportunity for local authorities across the nine regions to save significant money on energy costs. By joining collaborative and compliant contracts that represent real value for money and greater control over the supply market authorities can make huge savings! Read Case Study

Top tips for making savings through better procurement in energy - Members Guide Download

Available Frameworks

There are currently over 20 Energy frameworks on the HUB's Contract Database

How savings are achieved

Assess whether you have all your sites included in your portfolio

Beware of sites missed off the portfolio, which are then subject to off contract prices

Collaborate ideally with large providers or groups of authorities

Delivery of savings

FAQ's

Q1. My contract is coming up for renewal, how should i proceed?

A1. Be aware there is a national project commencing. therefore explore whether you can procure your energy through the OGCbs framework, PRO4 or some other collaborative arrangement, see guide attached to this page.

Q2. What is deemed the best way to save money in this market?

A2. There are 2 options

1. Forward buy your energy if indications show it is going to increase in price

2. look at flexible priced arrangements