YPO - 001100 Supply of Electricity and Ancillary Services

Tender description

YPO are looking for a Supplier to be appointed onto a Framework Agreement for the supply of electricity, as well as related ancillary services, primarily for use in the local authority sector, education sector, emergency services sector and any of YPO's permissible users. This Framework is designed to meet the needs of both YPO and Other Contracting Authorities by establishing an agreement where the end customer will enter into an electricity supply agreement with the Supplier and the Supplier will supply electricity, as well as any ancillary services that the customer requires, direct to the end customer. Any potential tenderers must have a commercial supply licence and listed on the OFGEM approved supplier list. The Framework Agreement will cover the period from 1st April 2023 to 31st March 2027 with two options to extend for an additional 24 months. The first decision to extend the contract period will be taken by January 2025 and will be dependent on satisfactory completion of all aspects of the contract to date, the current market conditions for this category and YPO's contracting structures. The maximum contract period will therefore be 8 years, from 1st April 2023 to 31st March 2031 (subject to an annual review, incorporating management fee negotiations and KPI performance). The justification for a 4+2+2 (possible 8 years in total) length Framework, is due to the complexity of the proposed Framework Agreement, taking account of the national procurement policy around tackling climate change and given the nature of the service/product, to ensure customers can gain the maximum benefits from using the Framework without compromising the potential for open competition in the wider market. Wholesale electricity prices are currently at the highest ever and having a longer Framework, will allow for YPO to operate a much longer term purchasing strategy without the complexities of sleeving to another provider. A longer term purchasing strategy will mitigate risk for our customers and YPO will be able to provide them with longer term budget certainty in a volatile market. We have also considered that the majority of our customer have declared climate emergencies and have net zero targets of 2030 and beyond and the UK Government itself has a legally-binding target to reduce greenhouse gas emissions to net zero by 2050. Having a longer term partnership with an electricity Supplier in a framework format will support our customers on this journey, as one of the biggest contributors to carbon emissions is energy consumption. The collaborative approach with a Supplier for a longer period, will allow for support with reducing consumption/becoming more efficient, setting up effective power purchase agreements and potential for additional support on social value.