News story

Energy contract signed and set to deliver £97 million

A new long-term energy contract will lower the amount government pays for energy and generate local jobs.

This was published under the 2010 to 2015 Conservative and Liberal Democrat coalition government


Cabinet Office and Air Products Plc today formally concluded their deal for a long term contract to deliver electricity to government for 20 years at a fixed price. This will significantly lower the cost government pays for energy and will support the creation of hundreds of local jobs.

Latest calculations in finalising this deal means savings of £97 million can be expected over the life of the contract. Worth 2% of government’s energy spend, the innovative fixed agreement will provide stability in what the public sector pays for energy.

The deal will allow government - via the Government Procurement Service (GPS) – to buy a portion of its energy directly from a UK-based generator at a low fixed price via an innovative Power Purchase Agreement rather than buying entirely through short-term wholesale markets which are subject to unpredictable price fluctuations.

Published 18 July 2013