The National Energy Hub are in the process of establishing OJEU (Official Journal of the European Union) compliant energy frameworks dedicated to public and third sector organisations. The National Energy Hub has seen recent cases where organisations are analysing the different options available to them when it comes to fully managed energy services or believing they only have the option of a GPS (Government Procurement Service) agreement.
Energy Buying for the public sector
Fixed Energy Contracts
For most public sector organisations fixed energy contracts are the most popular way to purchase energy providing the highest level of budget certainty and protection against spikes in the energy market. On the downside, fixed energy contracts only provide a one day window to purchase energy for the duration of the contract so while you are protected against market increases after your decision is made, you cannot take advantage of further saving opportunities in a falling market.
Flexible Energy Contracts
With flexible energy contracts, organisations can take a more controlled approach to energy purchasing. This type of energy contract enables organisations to make multiple purchasing decisions 12 months or more before a contract has begun. This allows the buyer to make purchasing decisions over months, quarters, seasons or years with unlimited buys and sells in line with their volume tolerance.
Another way to purchase energy for your organisation is through a pre-agreed regional framework as these can provide you with the option of a fixed or flexible energy contract by aggregating your volume with other public sector bodies.
The National Energy Hub
The National Energy Hub are a private purchasing organisation who offer fully managed services giving organisations across the UK a ‘best of both worlds’ opportunity to purchase energy. The OJEU compliant energy frameworks forward purchase energy giving your organisation budget certainty protecting you from unexpected market spikes and being able to take advantage of a falling market. See our info graphic for more detail.
Your Options - Summary
Option 1 – Tender your own OJEU contract
While The National Energy Hub can offer this service on your behalf it is only recommended you undertake a OJEU tender if your organisation has a large energy portfolio.
- No direct access to wholesale energy markets.
- Sole energy purchasing does not provide the same leverage as aggregating your volume with another organisation.
- Energy purchasing results in cost to service being increased in line with supplier margins.
- Create a bespoke purchasing strategy that is right for your business by working closely with our Business Energy Intelligence Consultants.
Option 2 – Sign up to GPS (Government Procurement Service)
- You sign an agreement without knowing how much you will pay.
- Not able to take advantage of a falling market.
- Most non-energy charges are passed through with no forecast to assist your business with budgeting.
- Value Added Services may not be available.
- Minimum 12 month commitment.
- Largest public sector energy buying group in the UK
Option 3 – Continue with your current regional framework
- Normally in collaboration with City Councils, bespoke billing not available.
- Collaborative working as well as direct access to other service agreements through your provider.
- Energy Procurement Group’s (EPG) regional working committee promotes sharing knowledge and efficiencies in some regions.
Option 4 – Join The National Energy Hub Public Sector Framework
Moving to our framework agreements;
- A fully managed service for energy procurement and management.
- Direct access to Value Added Services (VAS).
- Non-energy costs fixed annually or passed through for duration of agreement.
- Energy purchased in advance (PIA) to aid budget certainty.
- Most cost effective and risk averse method of purchasing energy.
- Multiple purchasing opportunities to take advantage of a falling market.
- A transparent and impartial consultancy with decades of energy experience supporting private, public and third sector organisations with their energy procurement and management.
The National Energy Hub’s in-house Energy Experts can support your organisation with identifying which option is the most suited for you. They will review your organisation’s requirements, energy spend and analyse the following implications:
- Human Rights Act
- Diversity & Equal opportunities