Tower Hamlets Council has approved plans to spend £63 million on securing the supply of electricity and natural gas for its corporate estate over the next three years, a decision aimed at mitigating risks in a highly volatile energy market.

The decision, made at a Cabinet meeting on Wednesday, July 15, 2026, will see the council commit to purchasing electricity for an estimated £40 million and natural gas for an estimated £23 million, exclusive of VAT, from April 1, 2027, to March 31, 2030. This represents a projected cost of £21 million for the upcoming period, a decrease from the previous year's contract of £23 million, although specific unit costs are not provided.

Architectural rendering of a proposed multi-story residential building with balconies and surrounding trees.
Architectural rendering of a proposed multi-story residential building with balconies and surrounding trees.

The council is seeking to mitigate risks associated with price and supply volatility in the energy market, which are exacerbated by geopolitical factors such as the Russia Ukraine war and most recently the Iran war and the closing of the Strait of Hormuz . The long-term commitment aims to ensure supply certainty and value for money .

This continued commitment to the Government Commercial Agency (GCA) framework is seen as the most effective way to procure energy. Beyond supply certainty and value for money, the GCA framework offers flexibility with three purchasing strategies (6 month, 12 months and 24 months) to mitigate against market volatility . It also provides access to the wholesale energy market and incorporates all the latest government policy requirements including social value (Fighting Climate Change and Wellbeing) and carbon net zero . The framework has been used by the council since 2009.

Architectural rendering of a new multi-story residential building, likely part of the Mayor's Accelerated Housing Programme.
Architectural rendering of a new multi-story residential building, likely part of the Mayor's Accelerated Housing Programme.

The contract will be reviewed annually, with the option to exit after the first year. Social value initiatives with EDF Energy are also being pursued within the borough as part of this arrangement.

Mayor Lutfur Rahman, who chaired the Cabinet meeting, emphasized the importance of securing energy supply at favourable rates, especially given the current market volatility. The full details of the decision can be found in the Public reports pack 15th Jul 2026.

Architectural rendering of the Bethnal Green development, featuring the Idea Store and new housing.
Architectural rendering of the Bethnal Green development, featuring the Idea Store and new housing.