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.
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.
Electricity from generating stations built under the NFFO arrangements in England and Wales (NFFO 1–5), Northern Ireland (NI-NFFO) 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.
In October 2006 a Statutory Instrument brought about technical changes to correct an anomaly in the treatment of Combined Heat and Power stations under NFFO.
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