FAO: head teachers and school business managers
Keeping students and staff warm throughout the winter, so they can continue to create great learning experiences, is a key priority for school leaders. As the winter begins to bite, many are naturally concerned about how they can do this in the face of rising energy bills.
To help schools plan ahead, we made energy management the topic of our second ‘Focus on’ webinar. Our experts, David Bate and Anthony Day, outlined the drivers of volatility in the market and what schools can do to protect their budgets.
The most obvious factor driving volatility in the market is the war in Ukraine, but concerns existed even before it began. Back in Autumn 2021, we were seeing low energy storage levels across Europe at just 58% compared to 85% in the same period the previous year. It was then announced that there were delays in the new Nord Stream 2 pipeline between Germany and Russia.
These factors were already starting to push up the short-term price of energy. In February this year, when the war in Ukraine started, we saw a 34% increase in the gas price in just one day. As Europe announced sanctions against Russia and sought alternative energy sources, Russia announced that it wanted all its energy to be paid for in its own currency, the Ruble.
This summer, in response to the war, Germany shelved the Nord Stream 2 project and Russia retaliated by announcing it was closing Nord Stream 1 for maintenance. This has all disrupted energy supplies and prices.
The current energy guidance from the Department for Education (DfE), says:
Don’t allow your energy contracts to expire.
Avoid signing long-term supply contracts.
Consider joining a DfE approved framework contract.
Reduce energy usage across your estates.
If you are purchasing your energy as a single school or Trust, you will have insufficient volume to benefit from multi-purchase basket strategies so will be having to agree on the spot contracts which will be set by the market on the day of commitment, when doing this you must be sure that you understand the energy product you are using. In addition, being tied to a long-term contract may prevent you from benefiting if the market diverges downwards. This is why an energy framework contract can be more beneficial.
An energy framework gives you the advantage of being able to consolidate your energy volume with other members to attract better rates. They work by enabling you to buy energy in advance through a purchasing organisation. For example, in Staffordshire the electricity framework has been extended to March 2027. Members purchase a full year of energy through the Yorkshire Purchasing Organisation (YPO) which is supplied by Npower. The procurement cycle starts in October for delivery the following April.
For gas, the Staffordshire framework runs until 2025. YPO purchase the gas a year in advance in April which is supplied by Corona energy.
Both products are evergreen, which means you remain in contract unless you choose to terminate it.
The government has also announced an Energy Bill Relief Scheme for non-domestic customers who are on flexible contracts. This will discount the monthly weighted cost of a unit of energy for those who currently pay more than 21.1p/kWh for electricity and 7.5p/kWh for gas.
Utilising building management systems can help you to magnify your savings by replacing old plant systems and controls, and ensuring they work harmoniously together. If you are managing energy usage in schools, it’s essential for you to:
Find out what all the devices are in your boiler house and get the user guides for them.
Make sure you know how to run your devices efficiently by optimising the time and temperature settings.
Understand how you can zone buildings, so you can place staff who are working during half term in one block and only heat one zone.
Understand the optimum start period to pre-heat your buildings before the school day.
Establish a written ‘shut down’ routine for weekends, bank holidays and school holidays.
Never alter heating on a Friday.
Regularly look at your energy data online.
Register with the Carbon Trust to receive tools, resources and training on saving energy.
Getting to grips with all this can take time but get it right, and you will soon be reaping the rewards.
Our energy management services can help you to track your energy consumption and make your money go further, while reducing your carbon footprint.
Get in touch to find out more