Contract Award Announcement
National agreements for the supply of electricity has been awarded to Scottish Power and Scottish and Southern Energy (SSE). Scottish Power will supply half hourly and domestic metered sites as well as un-metered supply points. SSE will supply the non half hourly metered sites
The contracts commenced on 1 October 2009 and will run until 30 September 2012, with the option to extend for a further year. The contract is available to all Scottish public bodies. Organisations who have signed an Agency Agreement with Procurement Scotland will migrate to the contract throughout this period as their current supply arrangements end. Over 95% of in-scope Scottish public sector volume is committed to this national agreement.
Benefits from the contracts will include reduced management fees and an innovative contract model which will lead to additional cost savings. Through the implementation of a risk management policy, electricity will be purchased prior to the year of consumption. This will allow for budget certainty and will manage the risk associated with purchasing in volatile energy markets.
Procurement Scotland have also secured a deal on domestic electricity supply points which results in a 3% reduction on Scottish Power's standard tariff. This reduction will track any future movements in Scottish Power's tariffs.
The Scottish Power contract will supply energy from renewable sources in Scotland. In addition, the company will offer a range of energy efficiency initiatives to reduce demand, and includes the option to sell energy from small scale renewables back onto the grid
The SSE contract provides access to a range of low carbon and renewable technologies, such as combined heat and power, solar and biomass.
To confirm if your organisation has signed an agency agreement to participate in the national contract please contact the utilities team at:
Email: procurementutilities@scotland.gsi.gov.uk
Read the full news release on the Scottish Governments website.
Agency agreement and template packs
Public bodies wishing to access the national electricity contract must provide a signed Agency Agreement to Procurement Scotland. This document delegates authority to Procurement Scotland to purchase electricity in the wholesale electricity market.
As part of the agreement, public bodies must also provide site data information in the format required in the electricity contract data templates. Both the Agency Agreement and data templates are available to be downloaded below. A link to Procurement Scotland's customer guide for the national electricity contracts is also included below.
Background
- National Category Forum: The NCF is fully established, including members from across the Scottish public sector.
- Request for information: An RFI document was issued to energy suppliers and energy consultants in March in order to build a better understanding from the suppliers' perspective as to how best to take the public sector portfolio to market. Feedback from the suppliers was extremely positive in terms of recognition and being consulted prior to the ITT process and also in the outlook for taking such a large portfolio to market. Procurement Scotland was able to use the feedback from the RFIs in consultation with National Forum members to help formulate the strategic sourcing strategy.
- Completed category plan: The electricity category plan is complete and has been endorsed by the NCF.
- Completed strategic sourcing document: The electricity strategic sourcing plan is now in published version and has been endorsed by the NCF and by all sectoral Centres of Expertise. The document provides an overview of the Scottish public sector electricity portfolio and documents the options considered and chosen for the formation of a national electricity contract.
- Collaboration: The utilities team have endeavoured to comprehensively consult and inform both the customer and the external supply base. Various presentations and workshops have been completed together with individual site visits for one to one communication.
- Electricity workshops: To enable wider consultation a series of workshops were held across Scotland. Starting in Edinburgh, a further three workshops were held in Glasgow, Perth and Inverness. The workshop agenda focussed around the strategic sourcing strategy, risk management and the Agency Agreement which is the document public bodies require to sign in order to access the national electricity contract. The cross sectoral audience included representation from finance, energy management, technical and facilities and procurement.
- Energy consumption survey: A detailed energy survey carried out in January 2008 which covered all sectors of the Scottish public sector gathered information on the number of sites, contractual status and energy management issues that helped form the category plan.
- Utilities site database: A significant data gathering exercise has been undertaken to collate and analyse a complete register of sites across the Scottish public sector. This included some of the following information:
- number of sites / site name / MPAN number / consumption / voltage / billing address / % of green energy purchased
- Meter types: identifying this type of information enabled the utilities team to further define the portfolio into 4 baskets:
- half hourly / non half hourly / domestic / unmetered
- Electricity ITT: tender responses were received on 17 October 2008; thereafter, the cross-sectoral evaluation team reviewed and scored each response in line with SPD best practice. Contracts were awarded in April 2009.
- Agency Agreement: This document has been finalised by Procurement Scotland following consultation with members of the National Category Forum, Centres of Expertise, Scottish Government Legal Department and various public organisations. The agreement essentially allows Procurement Scotland authorisation to purchase electricity and enter into supply arrangements on behalf of Scottish public bodies.
- Risk Management Policy (RMP): A risk management policy and procedures documents was created following a pan public sector workshop. This document was reviewed and amended before being finalised by the Risk Management Committee on behalf of the Scottish public sector. The RMPP formulates the rules and policies governing the flexible purchasing of both electricity and gas on wholesale markets.
- Risk Management Committee (RMC): After extensive cross-sectoral consultation, nominations were invited for membership of a Risk Management Committee. The Committee, consisting of a mixture of finance, procurement and technical specialists meets regularly to review the risk management policy and procedures for purchase decisions.
- Office Of Government Commerce buying solutions (OGCbs):Following a number of suppliers meetings and consultation with various stakeholders across the public sector, Procurement Scotland is currently utilising OGCbs in facilitating electricity purchases from the wholesale market and in supplying a comprehensive database management system of sites.