The Scottish public sector will get power at the best possible price thanks to an innovative new way of buying and managing demand for electricity.

For the first time, the Scottish Government has launched a tender to supply electricity on a national basis to all public bodies.

Councils, health boards, police and fire services, universities and colleges, Scottish Government Agencies and non-departmental public bodies will be able to use the contract from next autumn.

The annual public sector electricity bill is around £200m. The new strategy will harness the combined purchasing power of the public sector to save taxpayers' money by streamlining the management of many different contracts and ensure better energy saving measures.

This complements measures already being taken by the Scottish Government to help homeowners and industry with rising fuel costs.

Finance Secretary John Swinney said: "As energy prices are rising, this Government will take all practical steps to protect the public purse. The national procurement of electricity will be important in minimising the impact of spiralling prices on the public sector.


"As well as getting best value for money, this will support the Government's efforts to reduce greenhouse gas emissions and make Scotland greener. The contract will provide public bodies with access to energy management measures such as advanced metering, small scale renewables initiatives and opportunities to sell electricity into the grid.

"We are doing all we can to relieve the pressure of rising fuel costs on Scotland, through a range of government programmes. Given that the UK Government is benefiting from an energy tax windfall, we want the Chancellor to introduce measures to help, for example the introduction of a fuel duty regulator.

"Our national electricity strategy move is a further step in the radical public procurement reform programme. If maximum benefits are to be derived from this initiative, it is imperative that take-up of the contracts is as high as possible. I therefore want all Scottish public bodies to build on the excellent collaboration so far by committing to use the national contract in the future."

Key aspects of the strategy include: purchasing in tranches prior to the period of consumption via the appointed supplier(s) will guarantee certainty of pricing in advance; the combined purchasing power of the Scottish public sector is expected to deliver significant reductions in management fees.

The contract is due to be awarded around the turn of the year, with purchases from the wholesale market made from early 2009 onwards. The initial supply period of three years will run from October 2009 to September 2012, with options to extend by a further year.

(GK/JM)