Energy Procurement framework

Scotland’s statutory 2045 net zero target, set under the Climate Change (Scotland) Act 2009, is more ambitious than the UK-wide 2050 target, and the Scottish Government’s Heat in Buildings Strategy sets out a clear trajectory away from fossil fuel heating in existing buildings. For social landlords, this has direct implications for how they think about gas procurement. Locking into long multi-year gas supply contracts without considering the Heat in Buildings timeline could create stranded cost risk if properties are scheduled for heat pump or district heating installation within the same period. PfH Scotland recommends members consider their decarbonisation programme alongside their energy procurement strategy, rather than treating the two as separate decisions. Short to medium-term contracts, or flexible arrangements that allow exit at reasonable cost, may be preferable for properties with confirmed retrofit plans. 

Collective purchasing works by aligning energy contracts from multiple organisations to increase combined buying power, then trading in the wholesale market on behalf of the group through PfH Energy and Inspired Energy’s trading desk. Instead of each organisation separately fixing a price at a single point in time, the collective makes multiple purchases across a trading window, averaging out exposure to market peaks and troughs. This approach has the potential to outperform a simple fixed-price contract, particularly in volatile markets, and is governed by robust trade reporting processes. It suits organisations that want market engagement without managing a trading strategy themselves. PfH Scotland works with members to explain how the collective functions and what governance applies before they commit. 

Communal heating systems and district heat networks present specific procurement and billing challenges. Where a landlord supplies heat to tenants from a centralised system, the Heat Network (Third Party Access and Miscellaneous Provisions) (Scotland) Regulations and the wider regulatory framework for heat networks under the Heat Networks (Scotland) Act 2021 apply. Landlords are required to treat heat network customers fairly and charge transparently. The energy cost within a communal or district heating arrangement needs to be managed carefully because it directly affects what residents pay, and price volatility that might be manageable in a corporate energy budget can have real affordability consequences at household level. PfH Scotland can advise on how to structure energy procurement for communal systems and how the framework’s supporting services, particularly invoice validation and change of tenancy billing management, apply in a heat network context. 

Renewable Energy Guarantees of Origin (REGOs) are certificates issued to electricity generators confirming that a unit of electricity came from a certified renewable source. When a supplier offers REGO-backed electricity, they’re matching your consumption with renewable generation certificates, allowing you to report that your purchased electricity is from renewable sources. For Scottish landlords with sustainability commitments, board reporting requirements, or obligations under the Procurement Reform (Scotland) Act 2014’s Sustainable Procurement Duty, REGO-backed supply provides a documentable basis for your renewable electricity claims. The framework includes access to REGO-backed and RGGO-backed options, and suppliers provide supporting certifications. It’s worth noting that REGOs relate to purchased electricity, not to the heating or hot water supply in properties, which is a separate consideration under the Heat in Buildings Strategy. 

The Scottish Housing Regulator monitors how registered social landlords manage their financial health, and energy is a significant area of expenditure. Landlords are expected to demonstrate that major contracts are procured compliantly and that value for money has been pursued. Using a properly procured framework, with documented mini-competition and clear contract terms, provides the audit trail needed to satisfy that expectation. Beyond compliance, the KPIs built into this framework, covering change of tenancy timescales, billing hold arrangements, and objection notification, help prevent the billing errors and disputed charges that can create both financial and reputational problems. Invoice validation services are particularly valuable for landlords managing large portfolios where manual checking of bills is impractical. 

Change of tenancy creates one of the most common energy billing problems for social landlords. When a property becomes void, or when a new tenancy begins, the transfer of responsibility between tenant and landlord accounts needs to happen promptly and accurately to avoid landlords being charged for consumption that should fall to outgoing or incoming tenants, or for disputes to arise later. The KPIs agreed under this framework include specific commitments on change of tenancy timescale and billing hold arrangements, giving landlords clear contractual standards to hold suppliers to. For organisations with high void turnover or frequent tenancy changes, this protection has direct financial value. PfH Scotland can advise on how to specify your change of tenancy requirements as part of the mini-competition process. 

Yes. The framework includes feed-in provisions and Power Purchase Agreement sleeving, which are relevant to landlords with solar PV or other on-site generation. Sleeving arrangements allow organisations to use their own renewable generation to offset purchased electricity, with the financial settlement handled through the supply contract. For landlords who have installed or are planning to install solar panels as part of a retrofit or decarbonisation programme, integrating generation management into the supply contract simplifies administration and can improve the overall financial return on the investment. PfH Scotland can advise on how these provisions apply to your specific generation arrangements.