The TEC Difference

The TEC Difference

Having issued members’ annual Benefit Statements on a record early date, it’s given us time to reflect on the overall story they tell.

Annual spend through TEC frameworks in the year to July 2020, a year like no other, was £194 million. This included £9.1 million of spend for new members covering energy usage of 131 million kWh . As these new members came on at different stages in the year these amounts increase to £12.4 million and 179 million kWh per annum for a full year.

Like-for-like spend and consumption was down by £8.7 million. This was a reflection of reductions in member estates, in particular, divestment through change of tenancy of 207 smaller electricity meters. The wholesale energy prices secured for this last year were also lower than the previous year, demonstrating TEC’s carefully controlled risk management strategy. Finally, and not surprisingly, there is the impact of the pandemic on energy demand, of which more later.

87% of the reported spend was for Higher Education institutions, 6.6% for Further Education establishments and 6.4% for National Museums, Galleries and large research establishments. Of the c130 members receiving Benefit Statements for 19/20, 41 TEC members each spent more than £1 million on energy in the reporting year, with 9 of these spending over £5 million each and 3 over £10 million. All of this shows that TEC are a service provider for members of all shapes and sizes.

Savings were quantified as £7.9 million, of which £5.6 million was “Cashable”, meaning it represented a cost reduction against what members would have paid by sourcing energy via alternative or direct arrangements. Included in this figure for the first time was the £279k collectively saved by the 20 members across the first 10 months of TEC’s long-term Renewable Power Purchase Agreement. This saving should continue and, we hope, be added to by further similar arrangements for more members in the coming years. At total member level, we returned £5.43 in savings for every £1 spend on fees.

Perhaps most pertinent this year is the c£900k cost avoided (quantified using approved sector methodologies) in carrying out procurements to source energy. This year saw the procurement of our 5^th generation flexible energy frameworks which ALL TEC members now use. Several members supported us in the evaluation as we ensured that the requirements reflected what the modern energy consumer needs from their supply arrangements.

Our competition continue to charge more for the services which you receive from TEC, around £2.5 million more at portfolio level. A benefit we have not attributed savings to is the fact that our services now include “The TEC Check”, our bill validation service added to the range and free of charge from April 2019. This service would be charged for elsewhere. The benefits of this have been seen with our Benefits Statements this year as the quantified spend and consumption reported is based on data from validated energy bills in 99.8% of cases, making it more accurate and reliable than ever.

The Pandemic and impact on the year’s energy usage.

While the impact of events this year including the national lock-down from March 2020 will have impacted individual members quite differently, the impact on the whole portfolio is clear to see, at least on electricity.

Electricity usage for members with us for this year and the previous year was down by 12%, with the graph below showing the period during which this demand destruction caused by Covid-19 was at its most severe.

What is perhaps surprising is the difference, or lack of it, on gas usage – down just 0.4% across the year but perhaps more impacted by weather than lock-down.

Of course the individual picture was mixed, with some members seeing variances of -44% to +18%, with institutions contributing to the research and testing effort to combat Covid-19 seeing increases due to longer working hours and weeks.

TEC continue to monitor the ongoing effect to energy demand as operational practices adapt so that we can support our membership through this pandemic.