This is a complicated subject so instead of giving you guidance tips on how to conduct an ITT energy tender I will signpost to Crown Commercial Services.
Note the below copy is written by CCS
The Energy category regulates the purchase and management of electricity, gas and liquid fuels. Additional services such as carbon offsetting are also available.
Our strategy focuses on:
- Centralising spend into single supply contracts, where possible, to aggregate demand and optimise energy prices.
- Effective risk management, in line with a tailored purchasing strategy, by market experts.
- Innovative agreements to reduce costs in comparison to market prices.
- Additional services and solutions to enable customers to monitor, control and manage demand to improve sustainability and savings.
- Origination schemes to harness unused energy produced across the government estate and interact with the market to generate further savings.
- Our long term goal is to access energy generators and producers (rather than wholesale suppliers) to further reduce price risk.
- This award winning category is the largest buyer of gas and electricity in the UK with skilled, in-house market analysts, risk management specialists and robust independent governance.
- We offer a transparent, not for profit service with dedicated internal energy customer teams and supplier managers.
- Savings are calculated using an average of market pricing opportunity against actual price achieved during the buying window.
- Savings of up to 49% have been achieved in our regular carbon offsetting eAuctions.
- A customer web interface to assist with the site administration process, along with access to online site and consumption data is currently being developed to improve customer service.
Public sector buyers can access the framework- ITT energy:
CCS has a number of energy agreements for public sector organisations to access including gas, half hourly electricity, non-half hourly electricity and liquid fuel, avoiding the additional cost and resource requirements of running a compliant tender yourself.
As energy is purchased so differently to other commodities all parties (CCS, suppliers and customer) sign up to a three way agreement made up of the:
- framework agreement which is a legally binding document between CCSand the supplier defining the terms of the relationship and the service the supplier will provide to customers
- customer access agreement between CCS and the customer which provides delegated authority for CCS to purchase energy on behalf of the customer
- model contract between the customer and supplier which allows the supplier to deliver the customer’s energy
This three way agreement is designed to optimise energy procurement enabling the public sector to gain maximum benefit from volume purchasing.
CCS lets a framework to the successful supplier for the cost to serve element only (this is the cost to deliver the energy to customers). CCS then purchases the energy directly from the market and the framework supplier acts as a facilitator by supplying the purchased energy to the customer.