The UK Government could save as much as £97 million on its energy bill under a 20-year contract formally finalised last week.

The savings will be £13 million more than the previous figure expected over the life of the contract with renewable generator UK Air Products.

The firm will build a £300 million waste-to-energy plant under the Power Purchase Agreement (PPA) to supply 37MW of energy. The deal is equivalent to 2% of the Government’s energy spend.

The announcement comes as the Government also pledged support for independent renewable energy generators in the UK last week, with an amendment to the Energy Bill.

The Renewable Energy Association (REA) welcomed the Government’s long-term deal with the generator.

Chief Executive Gaynor Hartnell said: “It is excellent to see the commercial arm of Government realising the benefits of contracting directly with renewable generators. The generator gets the benefit of a long-term PPA, which coupled with ROCs provides a steady income stream. The purchaser gets certainty over its future electricity costs. We hope more such agreements are finalised.”