1819-0105 – Gas and Electricity supply 2020-2024

Concepts

• gas distribution
• electricity supply
• kw half
• supply of gas
• gas
• electricity
• kw non half
• nhh

Location

Description

Supply of Gas, 100 KW Half-Hourly (HH) Electricity and Sub 100 KW Non Half-Hourly (NHH) Electricity

Ammendments to Previous Notice

CPV Codes

• 65200000 - Gas distribution and related services

Other Information

** PREVIEW NOTICE, please check Find a Tender for full details. ** The council’s utilities purchasing strategy is flexible, aggregated (with external clients), risk-managed, and is based on purchasing tranches of gas and power against set trigger prices to ensure budget certainty. This flexible strategy of buying over a four-year period helps to mitigate any sharp increases in market prices. Due to unforeseen circumstances (unprecedentedly high commodity costs ) which the contracting authority could not have foreseen this modification in required to increases the cost of all three Lots by the following: Gas – Lot No. 1 - £6,200,000 (50% of original value). 100KW Half-Hourly (HH) Electricity – Lot 2 No. 2- £3,800,000 (50% of original value). Sub 100KW Non Half-Hourly (NHH) Electricity – Lot 3 No.3 - £6,000,000 (50% of original value). Total contract value including this modification is £48,000,000 (50% of original contract, on the 50% maximum in Reg 72(1)(b)) The original contract estimates for the four-year period 2020-2024 were based on historic electricity and gas prices and a detailed estimate of the electricity and gas consumption at the sites included, allowing for a 5-10% +/- tolerance on both (commodity prices could only be procured after the contract was let and hence a flexible estimate had to be provided). Following successful procurement of electricity and gas in 2020/21 and 2021/22 using the flexible, aggregated strategy agreed by the Council, sharp rises in commodity prices occurred in September 2021, December 2021 and again in March 2022, following the threat of and then the invasion of the Ukraine by Russia. This action has since seen oil and gas embargoes imposed on Russia, the largest exporter to Europe, seriously reducing supply capacity and keeping commodity prices high. The high gas prices have had a knock-on effect of increasing electricity commodity prices, resulting in a large increase in the expected energy costs through the contracts for 2022/23 and necessitating a modification to take into account these increased costs for this financial year. Commodity market prices going forward to 2023/24, whilst lower than current market prices, remain considerably higher than 2021/21 and 2021/22. These circumstances were not foreseen at the time of the contract award and do not alter the overall nature of the contract.