Pan Government Energy Project

• Best Practice Energy Procurement
• Governance
• EST Stakeholders

The Pan Government Energy Project was launched in June 2007 and is sponsored and chaired by the Ministry of Defence.

The project strategy team, which is representative of around 70% of public sector buying organisations, has worked collaboratively to agree programme workstreams and criteria for best practice.  Being able to utilise the industry expertise and commitment of the strategy team members, the group have been proactive in developing new solutions for risk management and pushing the boundaries for innovation in order to deliver better outcomes for the customer.

The workstreams agreed by the Strategy Team are:

• Aggregation 
• Buying and risk management 
• Liquid fuels
• Supply chain development 
• Sustainability

The recommendation for all public sector organisations is to adopt aggregated, flexible and risk managed energy procurement.  Just under half of all public sector is maximising its spending potential which amounts to a significant spend:

• Approx £3.8bn Gas and Electricity spend (2008/9)
• Approx £1.3bn Liquid Fuel spend (2006/7)
  

 Approved solutions volumes for gas and electricity only. Correct as at April 2009.

Best Practice Energy Procurement

The Pan Government Energy Project has jointly developed best practice gas and electricity procurement criteria against which CPB frameworks are being evaluated. These criteria include:

- access to wholesale markets (including multiple purchasing opportunities)
- robust governance and risk management
- transparent pricing mechanisms
- minimum volumes for frameworks
- access to future options.

A peer review panel made up of independent representatives carries out the evaluation and assessment.

Other risk management options are being investigated for the future, which include buying energy directly from generators. This could help reduce long-term price risk, increase security of supply, and potentially stimulate additional sources of renewable energy.

The full criteria can be downloaded here (PDF, 18KB). Any CPB not currently engaged with the project, but wishing to be so, can contact the Project at energy@ogc.gsi.gov.uk.

Public Sector departments already contributing to the project can be found here. (PDF, 111KB)

Governance

Energy Category Collaborative Board (CCB)

The Energy CCB is a collaborative board chaired by the MOD Sponsor, with representation from a number of public sector organisations.  The Board sets the overarching strategy with key targets and objectives for the energy category. 

The CCB is accountable to the Strategic Stakeholder Forum (a high level representative group with an overview of all procurement across the public sector) for the delivery of this energy strategy. 

Energy Strategy Team

The Energy Strategy team is tasked with actually implementing and delivering the requirements of the Collaborative Energy Strategy.  Utilising its industry experience and expertise, the team initially devised the areas of work that would deliver most benefit for all stakeholders and set up cross party working groups who manage the individual projects.  The strategy team meets bi-monthly to check on the progress of the workstreams and set new direction where applicable. The team has been instrumental in delivering fundamental change across the public sector in procurement of energy and is charting new territory in innovative projects in risk management.

The EST is led by MOD, with members from:

• Department of Energy and Climate Change (DECC) - Formerly part of Department of Energy Food and Rural Affairs)
• Eastern Shires Purchasing Organisation (ESPO)
• Office of Government Commerce (OGC)
• NHS Purchasing and Supply Agency (PaSA)
• Buying Solutions (BS)
• The Energy Consortium (TEC)
• Department for Work& Pensions (DWP)
• Capital Ambition - Formerly The London Energy Project
• Procurement for Scotland
• Value Wales

In addition, the Departments of Communities and Local Government (DCLG), and Children, Schools and Families (DCSF), HM Revenue and Customs (HMRC), Kent County Council Laser and London Regional Centre of Excellence (RCE) are now members of the CCB.  Membership will continue to expand as others join the project.

The Strategic Stakeholder Forum (SSF) reports to the Commercial Delivery Board (formerly the Procurement Board) and is accountable for the delivery of the Collaborative Procurement Programme. The SSF launched four Pilot projects to test how collaboration can work for areas of common spend across the public sector.  These pilot categories are Energy, Business Travel, Office Solutions and Fleet.  Each Pilot has a senior Sponsor responsible for governance and programme management and a team drawn from across Central and Local Government.

EST Stakeholders

Stakeholders engaged by the EST to take forward the collaborative work include the following:

• Energy Suppliers
• Industry participants
• Customer fora
• Energy Buying Organisations
• Local Government Authorities
• Commercial Delivery Board
• Permanent Under Secretaries

Links to Documents:

• Governance (Powerpoint, 173KB)
• Best Practice Energy Procurement Criteria