What is NFFO?
Before the introduction of the Renewables Obligation (RO), the Non Fossil Fuel Obligation (NFFO), NI NFFO and Scottish Renewables Obligation (SRO) were the government's primary instruments of renewable energy policy. We refer to these collectively as NFFO. The NFFO and SRO schemes are no longer open to new generators, but existing contracts will continue until the last of them expires in 2019.
NFFO legislation required the former public electricity suppliers (PES) to buy electricity from renewable generators. The PES set up the Non Fossil Purchasing Agency (NFPA) in 1990 as their agent and it enabled them to carry out their obligations to collectively contract with renewable generators and comply with the legislation.
The NFPA became the electricity purchasing body in England and Wales in 2001. NFPA Scotland, a wholly-owned subsidiary of the NFPA, has acted as the purchasing body in Scotland since 2006.
What is Ofgem's role?
Ofgem has specific duties to ensure that all parties continue to meet their obligations under NFFO/SRO.
The NFFO/SRO contracts allow a generator to request a contract to be terminated because it is no longer, or can no longer reasonably be expected to be, economically viable. Our role is to review these requests and determine whether a contract can be terminated on these grounds.
We also have duties in respect to requests for amendments to NFFO/SRO contracts.
The NFFO legislation (England and Wales)
The most relevant pieces of legislation for NFFO contracts are:
- The Electricity (Non-Fossil Fuel Sources) (England and Wales) Order 1994 (Statutory Instrument (SI) 1994 No. 3259)
- The Electricity (Non-Fossil Fuel Sources) (England and Wales) Order 1997 (SI 1997 No. 248)
- The Electricity (Non-Fossil Fuel Sources) (England and Wales) Order 1998 (SI 1998 No. 2353)
- Electricity from Non-Fossil Fuel Sources Saving Arrangements Order 2000 (SI 2000 No. 2727)
- Electricity from Non-Fossil Fuel Sources Saving Arrangements (Amendment) Order 2001 (SI 2001 No. 3268)
- The Electricity from Non-Fossil Fuel Sources (Locational Flexibility) Order 2001 (SI 2001 No. 3914) which enables NFFO projects to move location and continue to be a qualifying arrangement.
The SRO legislation (Scotland)
There were three Orders in Scotland. The SRO Orders 1, 2 and 3 were made in 1994, 1997 and 1999. SRO contracts under Order 1 have now expired. The most relevant pieces of legislation for SRO contracts are:
- The Electricity (Non-Fossil Fuel Sources) (Scotland) Order 1994 (SI 1994 No. 3275 (S.190))
- The Electricity (Non-Fossil Fuel Sources) (Scotland) Order 1997 (SI 1997 No. 799 (S.76))• The Electricity (Non-Fossil Fuel Sources) (Scotland) Order 1999 (SI 1999 No. 439 (S.24))
- Electricity from Non-Fossil Fuel Sources (Scotland) Saving Arrangements Order 2005 (SI 2005 No. 549), and
- The Electricity from Non-Fossil Fuel Sources (Locational Flexibility) (Scotland) Order 2002 (SI 2002 No. 92) which enables SRO projects to move location and continue to be a qualifying arrangement.
Guidance for completing the economic questionnaire required as part of the submission for economic termination of a NFFO/SRO contract.
Please also see Ofgem’s approach:
- Dealing with requests for the economic termination of a NFFO/SRO contract
- Payment of the Fossil Fuel Levy in respect of contract amendments to NFFO/SRO
Contact the RO team on 0207 901 7310 (option 2) or at NFFOEnquiries@ofgem.gov.uk