1.3 The Non-Fossil Fuel Obligation (NFFO)

1.3 The Non-Fossil Fuel Obligation (NFFO) Bruno Prior Mon, 14/12/2020 - 01:56
  1. 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.
  2. 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.
  3. 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.
  4. 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.