Energy Procurement

Guidance on Energy Procurement

The Department for Education (DfE) provides guidance on important factors to consider before procuring energy for your school, which can be accessed here.

Additionally, a companion document is available that outlines key questions to ask when ending your current contract, obtaining new quotes, or entering agreements with new or existing suppliers.                                               

Both documents provide valuable insights into fixed/variable pricing, contract length, brokers, purchasing frameworks and non-commodity costs, making them essential resources to review well in advance of contract renewals. 

The DfE provides approved procurement frameworks for purchasing gas, electricity, and liquid fuel. These frameworks can help you achieve value for money while ensuring compliance with procurement regulations. 

If you need assistance accessing or understanding the frameworks, the ‘Get help buying for schools’ service offers free support. Support can be accessed via an online form. The team endeavour to reply within 5 working days.

Cost recovery

The DfE's has an approved energy cost recovery service. This supports schools and trusts to access specialist contract compliance reviews including electricity and/or gas bill audits (up to 6 years retrospectively) and identification of billing and/or payment errors. The contract operates on a commission basis in the event of any cost recovery. 

Smart Export Guarantee (SEG)

The Smart Export Guarantee (SEG) is a government-backed initiative requiring certain electricity suppliers (SEG Licensees) to pay small-scale generators (SEG Generators) for exporting low-carbon electricity back to the National Grid, provided specific criteria are met. For example, solar PV is eligible under the scheme.

Schools can sign up with a different supplier from their main electricity contract, as the SEG agreement is separate. To register successfully, schools typically need:  

• An MCS certificate
• A smart meter or an export meter capable of half-hourly readings  
• An export MPAN registered under the Balancing and Settlement Code  
• Proof of ownership  
• G99/DNO approval for the system  

A list of current SEG Licensees can be found here. SEG Licensees generally pay between 1 and 5.6p per kWh of exported electricity. Higher rates may be available if energy purchase and SEG agreements are with the same company. Price comparison websites regularly update tables of SEG rates. Searching “SEG price comparison” can provide the latest figures.  

Schools interested in the Department for Education’s Energy for Schools scheme (details below), should contact the DfE at energy.schools@education.gov.uk for more information on their facilitation of SEG agreements.  

For general SEG support, reach out to schoolenergyteam@essex.gov.uk 

DfE: Energy for Schools Scheme

The DfE recently shared the 'Energy for Schools' scheme, offering Schools and Trusts the opportunity to access their energy deal. The DfE manages contracts through the Crown Commercial Service (CCS) Energy Framework (RM6251), which buys energy over extended periods to reduce price fluctuation risks. The DfE Energy for Schools service is free to access and use, with no management fees, third-party administrative charges, or profits from onboarding schools. A pilot study indicated that participating schools reduced energy bills by an average of 36%. 

This is a variable rate contract which requires a 30 month notice period to exit. Schools pay bills directly while the DfE account management team support with escalations and resolve concerns if needed. The scheme opens every April, but schools must onboard by mid-September the previous year. For example, schools joining the April 2026 V30 basket need to onboard by September 2025. Interim basket rates may apply until the next V30 basket is available. 

Review additional guidance on contract length, as well as the strengths and limitations of variable pricing here.

Key documents

The Department for Education (DfE) has provided three key documents covering all aspects of the scheme, including contract length, how variable rates are determined, the onboarding process, and guidance on existing energy agreements.

1. Energy for Schools Presentation: Schools Commercial Team
2. Factsheet: Overview DfE Energy for Schools Service
3. Frequently Asked Questions

Interim rates

Depending on when your current contract expires, an interim rate contract may apply until the next available opportunity to join the V30 basket which always commences on the 1st of April each year. The School Energy Team has received the latest interim rates from the DfE below:

Please note these rates do not include the standing charges and are always subject to change. CCS recommend using your current standing charge rate and adding 5% to consider any increases that may be imposed.

DfE energy benchmarking

Before making any decisions, schools should use the DfE’s benchmarking service. This service analyses the schools last 12 months of energy bills, comparing costs with what the school would have paid under the DfE deal, based on V30 rates from the 2024/2025 financial year.

To participate, schools must provide:

• Meter number(s)
• Total annual consumption for each respective meter (if more than one
• Total annual cost/spend per meter (separated if more than one meter)

Schools can submit this data directly to the DfE via email at energy.schools@education.gov.uk 

Schools should compare their current gas and electricity costs, any quotes they have obtained from brokers or other suppliers, and the results of the Department for Education’s (DfE) benchmarking exercise. This comparison helps assess value for money and ensures schools can make the best decision for their energy procurement.

It is essential to evaluate all costs on a like-for-like basis, including commodity charges as well as non-commodity costs such as standing charges, VAT, and the Climate Change Levy. 

If the DfE benchmarking excludes any of these costs, they must be factored into all quotes to ensure an accurate total cost comparison. Commodity costs typically account for around 50% of an electricity bill and 65% of a gas bill, so a thorough assessment is crucial.
For support in gathering data, contact your current suppliers who should supply a 12-month (including half hourly data, if applicable) usage summary. 

If further support is required, reach out to the School Energy Team at schoolenergyteam@essex.gov.uk 

Key considerations before joining the DfE energy for schools contract

1. Read the DfE’s guidance on purchasing energy, available here
2. Read the DfE’s minimum standard questions that outline the necessary steps to take at the end of a contract, available here
3. Before committing to any contract, ensure that all relevant costs are accounted for, including standing charges, Climate Change Levy (CCL), VAT, and any additional fees. This will provide a complete picture of the potential total cost, enabling informed comparisons of current costs and quotes.
4. The V30 basket operates on variable rates. Schools should note that rates may fluctuate throughout the contract period, with gas prices adjusting as you go along, and electricity prices being recalculated monthly.
5. The DfE contract is a long-term commitment. Exiting the contract requires 30 months’ notice from individual schools, so it is crucial to consider if this aligns with your school's specific needs and circumstances.
6. Ultimately, it is the responsibility of the school to review all available resources and assess whether this option is suitable for their requirements. 

Further information

For any questions, requests for DfE to complete the benchmarking exercise, and next steps please contact: energy.schools@education.gov.uk 

Webinar on the V30 basket and in-detail explanation of the variable rates: Introduction to CSS Energy

Blogpost on the pilot showing schools saved, on average, 36% on their energy bills: A new way to buy energy for your school or trust

For any other queries please contact: schoolenergyteam@essex.gov.uk