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Schools can Save Money on Electricity Bills by Buying Together

February 20, 2019, 8:15 GMT+1
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  • Louise Hatswell outlines why, when it comes to striking a good deal with energy suppliers, schools are best off forming a united front...
Schools can Save Money on Electricity Bills by Buying Together

One of the biggest non-staff expenditure items that SBLs have to deal with is gas and electricity. We’re constantly warned about predicted increases in energy costs, adding yet more pressure to our already overstretched school budgets. Whilst we can make every effort to be more energy efficient and reduce our energy usage to prevent unnecessary waste, those rises will almost certainly have some impact on most schools.

For now, though, there are many options out there to help you become more energy efficient and reduce your energy costs. Earlier this year, as part of its ‘Good estate management for schools’ guidance initiative, the DfE published ‘Tips to reduce energy and water use in schools’ – a document offering some good, practical advice on saving energy and reducing wastage, which it says accounts for 20% of schools’ energy use. With the average energy spend per primary pupil working out at £29.08, and £41 per secondary pupil, that’s a significant amount.

Many LAs will buy their energy via tender on fixed rates annually. Schools are able to purchase their energy through those LA contracts, and historically many have done just that. However, this isn’t necessarily the most cost effective way of procuring energy – due to the volatile nature of the energy market, the price may have been fixed when the market was high.

There are several energy procurement specialists that can work with schools to help them secure a better deal on their energy. The DfE’s ‘Deals for Schools’ online resource includes links to several ways of procuring energy more effectively and to suppliers that can assist schools with energy efficiency projects.

Interest-free loans are also available, where repayments are offset against the savings schools make in their energy bills. The ISBL has an energy framework for education in partnership with energy procurement specialist Zenergi, which itself is an approved partner of both the ISBL and ASCL.

Further savings can be made by purchasing energy collaboratively. A recent example of this took place via the South Yorkshire School Business Leaders Group that I chair. My three schools had previously been with an LA energy contract, when we received notification from them that we should expect a 15% to 20% increase in costs the next financial year. The spend on energy across my three schools is around £100,000, so this increase would have represented a significant amount of money.

I posted on our online forum to see if any other schools were interested in potentially procuring their energy with me, to try and generate some savings by purchasing collaboratively. Six local schools eventually joined, and we tasked Zenergi with running the tender process for us, ensuring that all OJEU regulations were adhered to and that we were provided with the appropriate documentation.

The latter showed that our estimated costs compared with our current costs amounted to a percentage increase for my secondary school of just 6.7%, and we were also able to protect ourselves from any further increases by taking out a two-year contract. The saving for my secondary alone ranges from between £5,270 and £9,165 per year, based on the LA’s 15 to 20% predicted increase – and potentially even more, if that contract cost were to increase again the following year.

To get the ball rolling on cutting down your own energy costs, first check the notice period on your current contract. Giving notice in plenty of time should then allow you to look at procuring the most cost effective deal.

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