The energy market is changing at a rapid pace, with wholesale gas and power markets being extremely volatile, hitting new historic highs prices. The current surge in energy prices has had an effect on all of our lives, whether domestically or in our place of work.
The challenge for local authorities is to understand the opportunities and risks that these changes present. The NEPO Energy Team are responsible for procuring energy contracts on behalf of local authorities and other public sector organisations.
NEPO carried out a collaborative procurement project, resulting in the award of a contract to EDF Energy to supply the Electricity Supply and Demand Framework Agreement, used by 23 public sector organisations and valued at approx. £220m.
One of the main objectives of this procurement was to develop a relationship with a supplier that provides a sound basis for managing and reducing energy usage. Another was to deliver social value for the North East.
It is known across the industry that it has been historically difficult to embed social value into a large energy procurement. To help with this, NEPO would utilise the national LGA TOMS framework as part of this project.
As this is relatively new to the energy market, NEPO held extra engagement sessions with the market to ensure they were aware of the desired objectives. Suppliers were also encouraged to attend free training provided by the NEPO Business Club, with sessions focussed on the principles of the National TOMS and how to develop social value within a business.
The initial design of the project was co-created with months of engagement upfront to establish measures meaningful to NEPO and its customers. This assisted with the development of the specification and requirements, covering all supplier services from core operational requirements through to strategic ambitions, including social value.
In addition to monetary savings, a robust SLA and ambitious energy efficiency measures, the award of NEPO301 Electricity has resulted in several far-reaching commitments to deliver real social value within the North East. These commitments are measurable against TOMs, ensuring that tangible additional value is brought to the region as a result of the contract award.
This project has achieved an equivalent £70,000 commitment of social value delivery. This will make a tangible impact on the North East in terms of:
Working groups were established as soon as the contract commenced which generated several positive opportunities across the NEPO customer base.
As a result of NEPO’s work, EDF developed a wide range of educational content focussed on STEM subjects for primary and secondary schools. Topics covered electricity generation types, associated carbon factors, the focus on Net Zero and benefits of renewables. EDF created lesson plans that were classroom ready. To further support delivery, NEPO and EDF worked closely with an individual trust which has around 50 schools. They helped ‘teach the teacher’ on the content and support the implementation of lesson plans into the curriculum.
Alongside this, NEPO delivered sessions to raise awareness of what Carbon Net Zero is, how to define and report on it, alongside a series of overviews suggesting ways in which low carbon objectives can be achieved. The Covid-19 pandemic meant that although these were conceived as ‘in person’ events, the move to virtual sessions actually widened the audience.
Within NEPO’s framework agreement, EDF committed to financially invest in the delivery of decarbonisation for the customer base. After consultation with NEPO’s members, it was decided to put these funds toward the installation of two new Solar PV arrays in two large schools in Durham. To date, plans are well progressed with site surveys having been completed and technical solutions being defined. It is anticipated that installation will commence in summer 2022.
Not only will the delivery of these new PV arrays help the schools save money, generate zero carbon power and reduce their reliance on the grid, but the installations can also be a focal point for engagement and learning with the curriculum-based content.
Work has also taken place with the North East voluntary, community and social enterprise (VCSE) sector, who represent more than 1,600 charities, voluntary organisations, community groups, networks and social enterprises from across the region. NEPO, due to the social value offered by EDF, have become a member and support VONNE (Voluntary Organisations Network North East), which assists them in strengthening the region’s voluntary, community and social enterprise sector.