Question reference: S6W-10924
- Asked by: Jeremy Balfour, MSP for Lothian, Scottish Conservative and Unionist Party
- Date lodged: 7 September 2022
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Current status: Answered by Ivan McKee on 22 September 2022
Question
To ask the Scottish Government whether an eligible third sector organisation applying for use of its electricity framework agreement in the current economic climate will still receive the stated access to wholesale electricity purchased on the futures market long-term.
Answer
The national frameworks for the Supply of Electricity wholesale volumes are bought up to 2½ years in advance in tranches, following a proven ‘hedging’ purchasing strategy overseen by a cross-sectoral Risk Management Committee. The Committee comprises senior managers representing procurement, finance and energy management interests.
Whilst energy prices have risen to unprecedented levels because of global influences, the Scottish Government purchasing strategy has mitigated some of the increases for customers on the framework. However, given the substantially increased price risk that this market volatility has brought, the Risk Management Committee has temporarily suspended the on-boarding of all new customers with immediate effect in order protect the organisations currently using the framework from increase costs. Organisations that are currently customers (including some third sector bodies) will remain on the framework.
The Risk Management Committee will keep that decision under regular review and when market conditions and risk profile allow, will permit new customers to join.