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2
Agenda
Background and Concept
Sharing the benefits
Current Members
Contract Set Up
Contract Structure & Benefits
What the members are saying
Marketing
3
Background & Concept
Collective energy procurement service for UK arts organisations
Founding members: Royal Albert Hall, Royal National Theatre & Royal Opera
House
Arts orgs supporting one another
Main objectives:
Provide members with a transparent and mutually beneficial platform to obtain
competitively priced energy supply contracts
Deliver savings against the financial plan and the average market
Protect the members’ budgets
Best value for all members
Costs are fairly allocated
Set up as flexible contract – allowing PE to purchase energy directly in the
wholesale market
Timing and rules for energy purchases defined & governed by Risk Management
Strategy
4
Sharing the benefits
Pooling energy together – more attractive to suppliers
Leverage from Multiple brands
Access to wholesale market
Arts basket dedicated support team
Experts handling managing your procurement
Driving down energy costs and building green credentials
Transparent reporting
1st Year savings = 7% below market, Yrs 2 & 3 below market 8%
Contract in place easy to join
6
Contract Set Up
Half hourly electricity contract set up in April 2012
following competitive tender process
Contract awarded to Scottish & Southern based on: Lowest price
Fixing of most non-energy charges – only RO, DUoS & TUoS are
passed-through, but fixed for 12 months at a time
Attractive contract features, including:
Favourable trading arrangements – full access to wholesale market
prices & provision of sell-back facility
Ability to actively manage customer portfolios
Risk Management Strategy is in place and showing the
benefits
7
Contract Structure & Benefits
36 month flexible contract commencing 01 October 2012 following a competitive tender
Favourable trading arrangements – full access to wholesale market prices & provision of sell-back facility
Customer-specific pricing Billing in line with simple fixed price contracts – rates set in 12 month
intervals Fully inclusive day/night unit rates
Standing charge
Available capacity charge
100% Renewable Energy supplied at discount on CCL rate Annual +/- 15% volume tolerance on group level Ability to re-forecast contract volume at any time Ability to add & remove sites Ability to add new customers
8
Risk Management Strategy
Risk Management Strategy set up by PE Agreed with founder members and applied to all basket members
Based on clients objectives and PE view on current and future markets
Setting of budgets for entire contract term
Objectives: Conservative approach to risk
Protecting customer budgets
Minimising costs
Tactics: Controlling risk through tiered purchasing
Utilisation of a range of purchasing triggers – stops, trailing stops, targets, time limits
9
Scottish & Southern Sustainable Generation
Technology 2012/13 2013/14 2014/15 2015/16
Biomass 10% 7% 6% 5%
Hydro 7% 6% 6% 6%
Landfill Gas 1% 1% 0% 0%
On-Shore Wind 49% 58% 62% 62%
Photovoltaic 0% 0% 0% 0%
Waste 10% 0% 0% 0%
Off-Shore Wind 23% 28% 26% 27%
Total 100% 100% 100% 100%
10
What the members are saying.....
Jessica Hepburn, Executive Director, Lyric Hammersmith
‘ It’s fantastic to be collaborating with our peers to improve our
collective sustainability. The Lyric is fully committed to being a leader
amongst arts venues who want to reduce their impact on the
environment and we are delighted that the Arts Basket has become a
major part of our green arsenal’
Sally O'Neill, Director of Finance, Royal Opera House
“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.”