Energy for growth: long term energy deal project announced
25 Apr 2014 12:41 PM
The government has announced the second Energy
for Growth project that will save money and support UK economic
growth.
The
government plans to use its buying power to save taxpayers’ money,
support jobs and boost the UK energy industry.
We
will soon invite electricity generators to bid for a new contract in the second
phase of the Cabinet Office’s ‘Energy for Growth’
scheme.
The
pilot: electricity
In
last year’s pilot Energy for
Growth project, the government agreed a 20 year deal with Air Products to
buy electricity at a fixed price from 2016. This will protect against rising
prices, saving taxpayers an estimated £97 million and helping to create
750 jobs in Teesside.
The
deal secured with Air Products also ensured the company’s investment in
the energy-from-waste ‘Tees Valley 2’ plant in Stockton on Tees,
which is worth an estimated £320 million.
Second project: renewable electricity
generators
For
this second project, we will invite bids for a similar deal for up to 15 years
with renewable electricity generators. We estimate that this will result in
comparable savings and could help unlock further investment in the renewable
energy market.
The
government’s Crown
Commercial Service - the UK’s largest energy customer - spends
£1.6 billion on gas and electricity every year. It buys energy for
approximately 75% of the entire public sector which accounts for 3% of total UK
energy demand.
On
a visit to the Energy for Growth project in Teeside, Francis Maude
said:
We
are reforming Whitehall to get the best possible value for hardworking
taxpayers, saving £10 billion in 2012 to 2013 alone. Before the last
general election, government failed to leverage its huge buying potential to
negotiate a good price and support the UK energy industry. 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.
Procurement will open for the second project soon. Find
out more on theCrown
Commercial Service website.
Background to Energy for Growth
Energy for Growth uses government’s combined
buying power, entering contracts directly with generators to supply electricity
over the long term and at a set price. This is part of the government’s
broader energy strategy to increase energy efficiency and create the right
conditions for investment in diverse, secure and sustainable UK energy
production.