05 June 2003 | David Arminas
The higher education sector's first major e-auction for electricity has saved £1 million.
Nineteen of the universities and colleges in the London Universities Purchasing Consortium collectively shaved 10 per cent from their £10 million annual electricity bill.
One institution saved up to 24 per cent in the event, which saw eight suppliers make bids on contracts covering 156 education sites.
David Thomas, chief executive of the Energy Consortium, a non-profit organisation representing the majority of higher education institutions, said he had hoped for a reduction of 4-6 per cent.
"But to get nearly 10 per cent justifies our work," he said. "Our auction provider, Utilyx, operated faultlessly."
Last autumn, the Energy Consortium undertook a smaller, pilot e-auction with four universities in the north east and saved 13 per cent off an annual budget of £1.8 million.
Twelve suppliers showed interest in the auction but after two-hour interviews with each prospective supplier four of them dropped out.
"Those that dropped out felt they couldn't meet the criteria for delivering on the contract, which takes effect in August," added Thomas.
London Electricity, the previous sole supplier, retained several institutions. The other successful suppliers are British Energy, Scottish and Southern and new supplier Atlantic.
Based on the electricity e-auction, the Energy Consortium is considering auctions for gas in conjunction with other higher education buying consortia.
"Part of the success of this auction is that all institutions had given me written consent to sign a deal on their behalf and their participation in the contract is legally binding," he said.
Thomas noted that universities are traditionally conservative and do not easily give up the right to make their own decisions and contracts.