- Privatisation was followed in short order by subsidy for low-carbon electricity in order to prop up nuclear energy. Although we were one of the few existing renewable power stations, we were refused a contract under the first tranche of the Non-Fossil Fuel Obligation (NFFO) because we questioned some of the government’s contract terms. We swallowed our objections for NFFO-2, and our deference was rewarded.
- NFFO was designed as a blind Dutch auction but modified almost immediately to give ministers the power to skew the outcome to favour certain technologies. We argued this was a mistake. The design also rewarded those who travelled most hopefully, not those who were most credible.
- We warned that the consequences would be that (a) ministers would not pick the balance of viable projects as effectively as the market would and (b) the incentives, “winner”-picking and depletion of the low-hanging fruit would lead to increasing proportions of non-viable projects being awarded NFFO contracts.
- The deployment levels fell accordingly, to negligible levels for the favoured technologies by the fifth and final tranche, despite a “will secure” test that supposedly ensured this would not happen. Ministers moved on to the next mechanism.
