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Natural gas

RM1076 Start date: April 2015 End date: April 2019

Under this single supplier framework for daily and non-daily metered natural gas supplies and ancillary services, we aggregate your volume and manage trading on your behalf to deliver value for money. We offer flexible short and long term contracts through the framework, which supplies around 885 government and wider public sector customers who spend approximately £400m per annum.

In order to manage and reduce the associated risks when buying natural gas for our customers, we develop legally compliant frameworks. These are created in line with the findings of the Pan Government Energy Project, which recommends that all public sector organisations adopt aggregated, flexible and risk-managed energy procurement.

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Savings (per annum) £ 31 million
Spend (per annum) £ 400 million
Volume (per annum) 14.7 TWh

The benefits

A transparent, not for profit charging structure

As civil servants we all share a common goal to minimise public sector spend and make savings. Service charges and costs of intermediaries can be hidden or unclear. This may allow them to inflate prices without you knowing, so you are unable to do a true price comparison. Our commission is low and transparent meaning we’ve got some of the most competitive supplier management fees around.

Safe, compliant access

Our bulk buying power means that we can work to get the best possible deals for our customers whilst being OJEU compliant. This provides you with the assurance you need and drives best value through providing a fully open competition.

Great savings through aggregation

We trade your volume requirements by aggregating them with those of other customers, so you benefit from savings as a result of our bulk buying power.

One of the biggest buyers of gas and electricity in the UK

We have in-house skilled market analysts, risk management specialists, and robust independent governance. Our knowledge and experience consistently saves customers time and money.

How to buy

What is most important to you?

Price certainty - My organisation requires a fixed price for the delivery year.

Short term locked

The short term locked product procurement strategy is to buy energy in the 6 months before the start of delivery. This gives you greater price certainty and will help you to set and manage your budgets ahead of the delivery year.

Key features

  • 6 month purchase window up to the point of delivery
  • traders enter the market multiple times during this period
  • all purchasing is completed before the first delivery month begins
  • once all volume has been bought, your monthly commodity price will be set for the entire delivery year

Product benefits

  • all customer volumes are aggregated together, allowing more buying opportunities across the window to smooth out market volatility
  • provides price certainty before the delivery period begins, enabling you to set yearly budgets
  • customers avoid any volatile changes in market prices during the delivery period
  • a sell-back facility allows traders to improve your price
  • fully risk managed product – a price cap is applied at the start of the purchasing period, meaning budgets are protected

Performance

Savings (per annum) £ 15.5 million
Spend (per annum) £ 109 million
Volume (per annum) 4.8 TWh

Price optimising - I am looking to achieve the best current market price and am willing to accept less budget certainty to achieve that

Short term variable

Our short term variable procurement strategy gives you the ability to optimise your price as buying begins 6 months before delivery and continues throughout the delivery year.

Key features

  • 18 month purchase window gives the traders a longer period to buy your energy
  • traders enter the market multiple times during the purchase window
  • our traders are able to buy day-ahead and intra-month, meaning we can adapt our purchasing to reflect our customers’ actual demand and changing weather conditions
  • prices change on a monthly basis

Product benefits

  • all customer volumes are aggregated allowing more buying opportunities across the window to smooth out market volatility
  • traders may be able to secure lower prices when purchasing energy during the delivery period as market risk premiums can be removed
  • a longer trading window gives the traders a greater chance of avoiding market spikes
  • a sell-back facility allows traders to improve your price
  • fully risk managed product – a price cap is applied meaning budgets are protected

Performance

Savings (per annum) £ 7 million
Spend (per annum) £ 65 million
Volume (per annum) £ 3.1 TWh

Price stability - I am willing to commit my volume for a longer period to protect my budgets and potentially minimise variability year on year

Long term variable

Our long term variable procurement strategy gives you potential access to lower market prices closer to the delivery start date. Managing your volume over a longer period of time also allows our traders to reduce your exposure to unfavourable market conditions.

Key features

  • the purchasing window is 42 months; commencing 30 months before the point of delivery and continuing throughout the delivery year
  • traders enter the market multiple times during the purchase window
  • our traders are able to buy day-ahead and intra-month, meaning we can adapt our purchasing to reflect our customer’s actual demand and changing weather conditions
  • prices change on a monthly basis

Product benefits

  • all customer volumes are aggregated allowing more buying opportunities across the window to smooth out market volatility
  • because the traders are managing your market exposure in multiple years, you should experience greater year-on-year price stability
  • a longer trading window gives the traders a greater chance of avoiding market spikes
  • traders are able to secure lower prices years in advance of delivery and during the delivery period when market risk premiums can be removed
  • a sell-back facility allows traders to improve your price
  • fully risk managed product – a price cap is applied meaning budgets are protected

Performance

Savings (per annum) £ 8.5 million
Spend (per annum) £ 177 million
Volume (per annum) 6.8 TWh

For help and support buying natural gas, get in touch and mention ‘gas’ in the comments box.