The UK Government could save £84 million in energy costs in the next 20 years under a new deal signed today.
The agreement between the Government Procurement Service (GPS) and Air Products include a 20-year fixed power purchase agreement (PPA) for the firm to supply 37MW of energy.
As part of the deal, Air Products will build a £300 million waste-to-energy plant in Tees Valley, which is expected to create hundred of jobs.
Francis Maude, Minister for the Cabinet Office said: “This is the beginning of a pioneering approach to how Government uses its collective buying power and long term demand to buy energy… Our aspiration is to develop world-leading, exportable technology and the new state-of-the-art site in Teesside will help the UK become a centre of renewable technology. This is about changing the way we work to not only get the best out of our suppliers, but the best out of the UK.”
Lisa Jordan, Air Products’ Business Manager for Bio-Energy Europe added the agreement will help the firm divert up to 350,000 tonnes of non-recyclable waste from landfill every year, which will be used to generate renewable energy.
The deal is equivalent to 2% of the Government’s energy spend. It is part of its Energy for Growth initiative launched in December last year, when Mr Maude had said the Government expected to save £155 million over 15 years.