Energy for growth: long term energy deal project announced
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鈥� 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鈥檚 鈥楨nergy for Growth鈥� scheme.
The pilot: electricity
In last year鈥檚 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 拢97 million and helping to create 750 jobs in Teesside.
The deal secured with Air Products also ensured the company鈥檚 investment in the energy-from-waste 鈥楾ees Valley 2鈥� plant in Stockton on Tees, which is worth an estimated 拢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鈥檚 鈥� the UK鈥檚 largest energy customer 鈥� spends 拢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 拢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 鈥� it鈥檚 good for the industry, good for taxpayers, and supports this government鈥檚 long-term plan for a stronger economy.
Procurement will open for the second project soon. Find out more here.
Background to Energy for Growth
Energy for Growth uses government鈥檚 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鈥檚 broader energy strategy to increase energy efficiency and create the right conditions for investment in diverse, secure and sustainable UK energy production.