UK government aims to save £97 million with renewable energy deal

Will Green is news editor of Supply Management
7 May 2014

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6 May 2014 | Will Green

The UK government is hoping to save around £97 million on its energy bill in a deal with renewable electricity generators.

Under the 'Energy for Growth' initiative the government will enter into contracts directly with energy providers to supply electricity at a fixed price for up to 15 years, bypassing the wholesale market.

In return, providers get the assurance of predictable demand, “giving projects the confidence to attract investment”.

The scheme is the second phase of government work that aims to “diversify” up to 50 per cent of its energy demand to deliver savings.

Under the first Power Purchase Agreement announced last year the government signed a contract with Air Products to provide energy for 20 years, allowing the company to build a dedicated energy from waste biomass generator and create 750 jobs.

This scheme is now projected to save £97 million and the government estimates the second phase will “result in comparable savings and could help unlock further investment in the renewable energy market”.

Cabinet Office minister Francis Maude said: “Energy for Growth ensures the security of our energy infrastructure - it’s good for the industry, good for taxpayers, and supports this government’s long-term plan for a stronger economy.”

The government’s Crown Commercial Service spends £1.6 billion on gas and electricity each year, buying for around three quarters of the entire public sector, which accounts for 3 per cent of total UK energy demand.

 

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