10 May 2007 | Antony Barton
Local authorities should seek expert advice on energy buying and collaborate to cut their £1 billion annual bill, according to new guidance from the Regional Centres of Excellence (RCE).
How to be successful in energy procurement examines purchasing options, risk management and the information required to seek the best deal, such as consumption data and meter readings. It also provides a list of useful websites and contacts, including buying consortia.
RCE information reveals energy costs have risen by more than 150 per cent in the past two years and prices can fluctuate by as much as 10 per cent in one day. A council going to market at the wrong time can pay 50 per cent more than another authority.
Steve Holland, director of the RCE procurement programme, advised councils to seek a professional buying organisation that understands the market. He added: "Buying energy has never been more complex and going to market at the wrong time, although with the best intentions, could prove very costly."
In March, the RCE launched the Local Government Energy Procurement Action Plan with the aim of cutting London councils' annual £160 million energy bill. It asks them to conduct a self-assessment of their energy strategy, allowing for progress to be benchmarked annually.