Our top tips for public sector demand side response procurement

Published by Helle Taylor 02 / 06 / 20

Flexitricity has developed successful partnerships with a wide range of public sector organisations – including NHS hospitals, universities and local authorities. In total, Flexitricity has delivered close to £1.5million in revenue and cost savings to the public sector over the last eight years.

Having tendered for public sector DSR contracts for over a decade now, we’ve seen first-hand that the procurement process is not always straightforward and can be time-consuming. Our goal is always to make life easier for our customers, so we’ve asked our public sector expert, Lisa Perrin, to compile a list of her top tips to make the procurement process easier and faster.

  1. Make use of the Crown Commercial Service (CCS) Heat Networks and Electricity Generation Assets (HELGA) DPS Agreement to access demand side response opportunities as this may limit the requirements for you to run your own OJEU compliant procurement exercise. CCS has an excellent customer support team who are on hand to help with any procurement guidance you may need. It is a quick and effective compliant procurement route. Organisations simply need to identify their requirements for the scheme, present these to the market and award a contract, all of which reduces timescales.
  2. Provide as much information as possible in your Invitation to Tender (ITT) whether this is via HELGA or through your own procurement route. Ensure that the suppliers interested in responding to your ITT have a direct point of contact within your organisation to raise any clarification questions. This helps to ensure that the responses you receive will be accurate first time round. If possible, also consider creating a tender response template so all suppliers submit their offers in the same format. This will save you time when assessing the responses.
  3. Flex Assure code of conduct scheme is a good way to assess the suppliers tendering for your contract. It’s a voluntary scheme which sets common standards for demand side response aggregators in five areas – sales and marketing, technical due diligence and site visits, proposals and pre-contractual information, customer contracts, and complaints. This helps to give customers assurance that they will receive good quality service from registered scheme members.
  4. If you’re new to demand side response procurement, it might be useful to ask for advice from your industry colleagues who have experience with it. Membership organisations, such as the Association for Decentralised Energy, might also be able to help. National Grid’s Power Responsive programme is also a good place to start your demand side response journey.
  5. While your energy supplier might be able to offer demand side response services, it’s always a good idea to compare them to other suppliers / aggregators. Monetising flexibility is complex and worlds apart from traditional energy supply. It requires a different set of skills, expertise and technology. In many cases it makes sense to continue to work with your existing energy supplier (provided you’re happy with their services) and contract with a different provider to manage your demand response participation.
  6. By far the best way to assess suppliers is to find out what their current customers say about them and assess their reputation in the industry. You could, for example, ask to see results from customer surveys, review case studies and ask for references from their existing public sector customers. Customer retention rate is another key indicator which helps you to assess customer satisfaction and the likelihood of being able to establish a strong and long-lasting relationship with your demand side response provider.
  7. Assess how a demand side response provider structure their fees – is it a fixed fee or revenue share model? Flexitricity operate a revenue share model and don’t charge upfront / fixed fees. A revenue share model can significantly reduce your risk and ensures that the supplier has a strong incentive to maximise revenue for you.
  8. The key to maximising DSR income is having access to all the available revenue streams. There’s a full list available on our website here, or you can check National Grid ESO’s website. While certain revenue streams might not be lucrative at the moment, things can change very quickly which means your provider needs to be able to be agile and move between all the available markets and revenue streams.
  9. Related to the above point, we recommend you assess to which extent each provider is engaged on a regulatory level and focused on innovation in order to drive the industry forward and give you access to new opportunities. You could ask for examples of innovation projects they are working on, or specific committees and working groups they are a part of.
  10. If you’re still unsure, pick up the phone and speak to us. Our friendly team will be able to help with any questions or queries. We are always happy to talk about what we do.

    Phone: 0131 221 8100

    Email: info@flexitricity.com

Helle Taylor

Helle Taylor Marketing Manager

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