A new initiative has been launched by the Government that will use its buying power to help investments in renewable energy infrastructure such as biomass and energy from waste.
The Government Procurement Service (GPS) is the largest energy customer in the UK spending £1.5 billion a year on gas and electricity for 75 per cent of the entire public sector.
In the New Year, it will pilot the Energy for Growth scheme that will pilot offering renewable generators long-term contracts for 2 per cent of the Government’s demand.
Contracts will be offered to renewable generators for a set proportion of their capacity for up to 25 years.
This should appeal to new projects which can bank on the guaranteed business to attract investment.
The Cabinet Office, which is behind the scheme, is aware of 150 projects which are currently stalled and need finance. This pilot will only be available for non-intermittent power such as biomass and energy from waste.
It should also help taxpayers by saving £155 million over fifteen years by agreeing the very best price in return for the financial security offered.
If the pilot is successful, the GPS intends to diversify up to half of its entire energy portfolio worth £750 million currently over the next five years.
Minister for the Cabinet Office and Paymaster General Francis Maude said: “Energy for Growth will use the Government’s clout as the biggest energy customer to shape the market for the good of the country. The UK is in a global race and that’s why we are working to attract investment into our energy industry to create jobs, develop technology and secure clean and diverse supplier for the future.
“This pilot will take us a step further towards our goal of hedging more of our energy needs against future price fluctuations, protecting the taxpayer. And because we will be increasing competition in the energy market, there could be a downward pressure on everyone’s bills as well.
“My department’s Efficiency and Reform Group is striving to make sure every taxpayer pound works as hard as it can. It’s not glamorous work but Energy for Growth shows the huge impact it can have.”