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Chamber and committees

Question reference: S6W-10925

Asked by: Jeremy Balfour, Lothian, Scottish Conservative and Unionist Party
Date lodged: 7 September 2022

Question

To ask the Scottish Government whether any envisaged benefits of its electricity framework agreement, such as a lack of market fluctuations and improved budget predictability, remain, despite escalating energy prices.

Current status: Answered by Ivan McKee on 22 September 2022


Answer

The national framework 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. As an illustration, if we were to seek a fixed price today on the wholesale market for Electricity 2022-2023, it would be more than double the contract prices that the Scottish Government framework currently enjoys.

The underpinning risk management strategy will continue to provide some mitigation against the unprecedented volatile market conditions.