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Public sector power goes greener
30/04/2009
A new electricity deal will save taxpayers up to £10 million a year and help public bodies go greener.
Scottish Power and SSE have been awarded innovative new contracts to supply electricity, available to the whole public sector.
Cost savings will come from bulk buying and the new arrangements will reduce electricity demand and promote greener power.
The Scottish public sector spends around £200 million a year on electricity. From this autumn, all public bodies including every council, health board, university and college can take advantage of the contracts.
Finance Secretary John Swinney said:
"At a time of high energy prices, this Government has secured significant savings for taxpayers, allowing up to £10 million a year of efficiencies to be spent on other front line services.
"On top of saving money this contract will create a greener Scotland. The public sector needs to show leadership if we are to achieve the ambitions of our Climate Change Bill. The contracts will help public bodies address emissions from energy use through a range of energy efficiency measures, access to renewable generation sources and opportunities to sell green electricity back to the Grid. The vast majority of public bodies have recognised these benefits and have signed up to this deal.
"The public sector spends £8 billion on procurement every year and this is another great example of radical procurement reform in action. Procurement Scotland has already secured significant savings for the public sector and we are taking every opportunity to get the benefits of working collaboratively, increasing efficiencies and saving money - money that can be reinvested in services, in stark contrast to the £500 million slashed from Scotland's budget by the Chancellor."
John McClelland who authored the report on procurement reform said: "With over 95 per cent of Scottish public sector demand signed up to use the national electricity contracts, and significant cost and environmental benefits secured, this is a great example of what can be achieved through joined-up collaborative procurement. This project helps position Scotland as a trail-blazer in this area for the rest of the UK - and beyond."
All of the electricity under the Scottish Power deal will be attributed to Scottish renewable sources, with a large proportion from the Whitelee wind farm, currently the largest onshore wind farm in Europe. Scottish Power has offered a dedicated energy management service to reduce demand, with opportunities to sell electricity from small scale renewables back into the Grid.
Willie MacDiarmid, ScottishPower's Director of Energy Retail, said: "We are delighted to have won the right to supply the vast majority of the public sector's power requirements in Scotland. The opportunity to supply green energy to our country's large public buildings, from the Scottish Parliament and Edinburgh Castle to all schools and hospitals, is a major achievement."
The SSE contract provides access to a range of low carbon and renewable technologies, such as combined heat and power, solar and biomass. Electricity supplied through this contract will have been produced from renewable sources including Glendoe, SSE's new hydro electric scheme which is Scotland's first conventional large scale hydro electric power station for 50 years.
SSE's Energy Supply Director Alistair Phillips-Davies said: "We are pleased the Scottish Government is demonstrating another step in its commitment to delivering a low carbon economic future and the creation of this contract has reaffirmed the Scottish Government's commitment to renewable energy and securing that energy at a competitive price."
The contract tender was announced in August 2008. The strategy is designed to mitigate risk in the current volatile market conditions by adopting a flexible procurement model. This model aims to reduce and manage financial risk by purchasing tranches of energy over a longer period. The strategy was predicated on taking four national 'baskets' to market in a parallel. Scottish Power won the half hourly (largest sites) domestic and unmetered baskets, while SSE won the non-half hourly contract.
Procurement Scotland, launched in March 2008, develops and implements procurement strategies for national Category A commodities on behalf of all Scottish public bodies. The organisation has been established in response to the ' Review of Public Sector Procurement in Scotland' report, which views national and sectoral Centres of Expertise (COEs) as the major vehicle for driving collaborative, advanced procurement in the public sector. Procurement Scotland has so far established a national approach for office supplies and IT Hardware for all Scottish public sector bodies which will result in significant savings.
The contracts contribute towards the Government's Economic Recovery Programme.