Chamber and committees

The Scottish Government Procurement and Property Directorate (SPPD) conduct all procurements in accordance with the requirements of procurement law which requires that we treat all providers equally and without discrimination. National Statutory, Policy and Best Practice guidance is available to support buyers across the public sector on delivering against our ambitions, along with a range of point-of-use tools, support and training for buyers and suppliers.

The Procurement Reform (Scotland) Act 2014 includes a Sustainable Procurement Duty which requires all public sector procurers to consider how their procurement process can:

“Facilitate the involvement of small and medium sized enterprises, third sector bodies and supported businesses in the procurement process” (Section 9(1)(a)(ii) of the Act)

To support the procurement officers with making decisions about the best approach to market, the Scottish Government provide a suite of Sustainable Procurement tools which ensure that appropriate consideration is given at strategy stage to the nature of the requirement, the complexity of the market and the volumes which require to be delivered to identify the best strategy and approach.

The outcome of this test is considered by the team and informs the strategy which is then presented to a cross sectoral User Intelligence Group (UIG), consisting of procurement and technical staff from across the public sector. For the provision of the national electricity framework, the UIG agreed with the SPPD recommendation that a single supplier framework would deliver best value, taking into account the requirement for competitive pricing and guaranteed security of supply.

The framework terms and conditions have a mechanism for local authorities to approach EDF to sell electricity which they have generated. The Framework also has included the option of Power Purchase Agreements.

The terms and conditions state that for the Supply of Electricity from a self-generating source the Supplier shall enter into a Power Purchase Agreement with such Scottish Public Sector Body on normal commercial terms. Such purchase shall stand entirely separate to the arrangements under the Framework and the Supplier shall not be under any obligation to sleeve the electrical output of such Public Body’s facility into the supply of electricity under the framework.

The Supply of Electricity agreement has also included the options of 6 different Power Purchase Agreement variations as part of the Statement of Requirements and the Terms and Conditions.

Inclusion of these terms within the structure of the Framework Agreements ensures that our procurement of Electricity is conducted in a fair and proportionate manner.

Within the National Electricity Supply Framework no power is procured from community – owned energy providers.

The framework has been set up to supply electricity to all of the Scottish Public sector. The supplier on the framework is required to purchase power on the futures market through a risk managed hedging strategy. The strategy is owned by a Risk Management Committee who represent all of the main Public Sector bodies.

The framework supplier needs to ensure it has the capacity to secure forward purchases on behalf of all framework customers. The supplier also needs to account manage each individual customer organisation including billing, invoicing, meter reading queries, complaints, energy efficiency queries, and social value programmes within the framework. As well as managing the consumption for over 30,000 meters for electricity that are part of the portfolio. Therefore, the supplier needs to have capacity to trade large volumes and achieve Value For Money for the whole Scottish public sector.

There is no mandate for (a) local authorities or (b) other public sector organisations that are generating power, to sell that power to Scottish Government or the appointed contractor under the National Electricity Framework.

Ofgem administer a Smart Export Guarantee (SEG) scheme where renewable electricity can be fed into the grid. Customers can apply for a SEG tariff, where their generating system meets the SEG eligibility requirements.

EDF (the current framework supplier for electricity) have a SEG licence to facilitate this service.

This or any other arrangement a local authority or public sector organisation puts in place to sell power and find the best price in the open market, is outside the terms and conditions of the electricity framework. However, a local authority or public sector organisation can have an export arrangement in place and remain part of the wider portfolio.

The Scottish Government has not made a recent assessment of the legislative requirement for Crown Estate Scotland to obtain market value in its transactions. An assessment is not required under the Scottish Crown Estate Act 2019.

All 32 local authorities use the national Framework for the Supply of Electricity, however if local authorities are also getting electricity from another source or another contract, then Scottish Government do not have visibility of this and this information would only be available from each individual local authority.

The National Electricity Supply expires on 31 March 2026, the framework has 3 optional 12 month extensions.

Variations to the framework can be made, however these must be in accordance with procurement law and be non-material changes and in agreement with the Supplier.

FLS has a portfolio of 25 operational windfarms on the national forests and land, amounting to a total of 1217MW installed generation capacity. FLS is not currently aware of any community ownership in this portfolio.

The Just Transition Fund has allocated £75 million to date, supporting projects and communities across the North East and Moray to create jobs, support innovation, and secure the highly skilled workforce of the future.

The National Electricity Supply Framework is not mandated however all 32 Local Authorities use the framework and there is local authority representation on the Risk Management Committee who oversee the purchasing strategy.

The total electricity use provided for in the electricity supply framework is determined by the estimated consumption of all framework customers. This is currently estimated at 2,293, 227MWh (megawatt hours) with a value of £686.7m, which will vary each year, depending on customer consumption.