December 8, 2022 7.30 pm This story is over 16 months old

Council expects reduced electricity usage next year, but will see a massive hike in cost

Bills cap helped, but still £2.1m extra to pay

Lincolnshire County Council will use almost 14% less electricity this year, but will still be charged more than 83% extra, according to a new report.

The authority’s Overview and Scrutiny Management Board next Thursday will be asked to renew its contract with the ESPO Electricity framework from 2024 onwards.

In their report, officers estimate that between October 2022 and September 2023 they will reduce their electricity consumption across both LCC properties and schools by 6.6million Kilowatt Hours (kWh) compared to 21-22.

However, the costs are estimated to rise by £6.4million.

Officers note that the government’s recently-introduced Energy Bill Relief Scheme will cap the price for six months from October 2022-March 2023.

This is estimated to discount the cost by approx £4.3 million, but that will still leave a rise of £2.1 million,

Over the last 12 months “events such as the conflict in Ukraine and its subsequent impact on European energy supplies have led to a rapid increase in wholesale energy costs” said the report.

“As a result, in recent months domestic and business users have regularly seen costs that are more than 300% higher than they were a year ago.

“Wholesale cost for electricity this winter peaked at circa 80p/kWh with annual fixed prices in excess of 70p/kWh”.

It warns that if countries across Europe fail to reduce demand, combined with a long winter, could lead to rolling blackouts in some areas and increased wholesale costs for winter 2023.

The ESPO framweork is used by more than 100 authorities, academies, housing associations and charities and brings together their requirements to secure favourable pricing.

Under the scheme a conservative amount of electricity is purchased before the start of the supply period meaning councils know the price they will pay for the next 12 months.

Officers will tell councilors that the ESPO framework continues to be the best option as it will “secure best value by providing competitive pricing, while reducing procurement, management and administrative costs”.

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