Before the introduction of the Renewables Obligation, the Non-Fossil Fuel Obligation (NFFO) was the Government’s major instrument for encouraging growth within the renewable energy industry. The NFFO applied in England and Wales. In Scotland and Northern Ireland, the Renewables Obligation (Scotland) (ROS) or the Northern Ireland NFFO (NI-NFFO) applied.

The NFFO assisted the industry by providing premium payments for renewables-generated electricity over a fixed period, with contracts being awarded to individual generators.

Current NFFO contracts

There are more than 400 NFFO projects currently operational. With the introduction of the Renewables Obligation, no new NFFO contracts will be awarded. Existing NFFO 3, 4 and 5 contracts will continue in their present form.

The eligibility of NFFO contracts for the Renewables Obligation

Electricity from generating stations built under the NFFO arrangements in England and Wales (NFFO 1–5) or in Scotland (ROS) will be eligible for the Renewables Obligation if it meets the requirements of the Obligation. Where output continues to be sold under an NFFO contract, the Non-Fossil Purchasing Agency will sell the electricity into the market. Renewables Obligation Certificates will be used to offset the cost of these contracts to consumers through the Fossil Fuel Levy.

Electricity generated subject to a qualifying arrangement under the NI-NFFO is not currently eligible for the Renewables Obligation. This is because there is no Northern Ireland Obligation, although one is due from 1 April 2005.

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