11 May 2007
Town halls should seek specialist advice to drive down energy costs, which can vary by up to 50% because fuel markets are so volatile, according to research.
A study by the government's Regional Centres of Excellence, published on May 3, has found that local government's £1bn annual energy bill could be reduced substantially if councils approached bespoke buying organisations, which could act as purchasers on their behalf.
Energy costs have risen by more than 150% in the past two years due to political uncertainties caused by the Iraq war and Russia's control of strategic supplies, diminishing fossil fuel stocks and the rapid economic development of large energy consumers such as China and India.
Prices can fluctuate by as much as 10% in a day. The report, How to be successful in energy procurement, says an uninformed council 'going to the market at the wrong time can find itself paying 50% more than an authority which went out to competition at a different time'.
PFmay2007
