Power Efficiency has announced a new collective energy procurement service on behalf of the Royal Opera House, the National Theatre and the Royal Albert Hall, which will operate as ‘The Arts Basket’ and which will be open for other theatre and arts venues throughout the UK to join.
The creation of ‘The Arts Basket’ has been driven by the existing relationship between the Royal Opera House, the National Theatre, the Royal Albert Hall and Power Efficiency, which has been responsible for the procurement of energy supplies for Royal Opera House for the past six years and for the National Theatre since August 2010. Power Efficiency also provides CRC Energy Efficiency Scheme compliance services to the Royal Opera House.
The new service will review all three organisations’ energy usage patterns, agree a risk management purchasing strategy and, from this, procure the best energy deal from the suppliers to purchase directly from the wholesale market on a ‘flexible’ supply contract.
Carrie Simpson, account manager at Power Efficiency, said, “The three venues are among the UK’s leading arts organisations, hence the term ‘The Arts Basket’ – other similar charitable arts organisations will also be offered the opportunity to join. By combining forces, The Arts Basket enables us to bulk purchase their energy at favourable wholesale rates giving significant cost savings to these institutions.”
Power Efficiency will present The Arts Basket to the suppliers for tender and will agree a three year framework agreement, for both half hourly electricity and gas. Once the contract is set-up, a risk management purchasing strategy will be agreed, based on each of the Basket member’s requirements and Power Efficiency’s market view.
The agreement combines a fixed charge for the distribution and transmission of electricity, depending on the location of the venue, and a flexible element related to the actual units consumed. Power Efficiency will consistently monitor the usage of the ‘Basket’ partners to ensure their deal remains competitive.
“Creating an Arts Basket dedicated to arts venues has many benefits,” continued Simpson. “The flex contract enables our customers to have access to the wholesale market, which is not available on standard ‘fixed price’ contracts. The contract is governed by a purchasing strategy and performance of the contract is measured against the market and set budgets, providing complete transparency for our customers. In 2008/2009 our customers on flexible contracts benefited from savings of over £35m, delivering savings ranging between 5-35% of their wholesale energy costs. The Royal Opera House was a part of this and we will continue to provide such benefits to all of The Arts Basket members.”
The Arts Basket will generate a high level of supplier interest due to the high profile of the Basket’s members, driving competition between suppliers to win the business.”.
Sally O’Neill, director of finance, Royal Opera House, said, “The Arts Basket is a major opportunity for venues like ours to cut energy costs which are a significant overhead. We want to encourage other arts venues and theatre managers to consider applying to join the Basket.”
Power Efficiency expects to have negotiated the energy contract for The Arts Basket by October 2012. It will also be discussing options for other charitable arts organisations to join in the interim and with the approval of the existing members.