World Library  
Flag as Inappropriate
Email this Article

Non-Fossil Fuel Obligation


Non-Fossil Fuel Obligation

The Non-Fossil Fuel Obligation (NFFO) refers to a collection of orders requiring the electricity Distribution Network Operators in England and Wales to purchase electricity from the nuclear power and renewable energy sectors. Similar mechanisms operate in Scotland (the Scottish Renewable Orders under the Scottish Renewables Obligation) and Northern Ireland (the Northern Ireland Non-Fossil Fuel Obligation).

Five orders were made under the NFFO before the UK government replaced it with the Renewables Obligation, the first order or 'tranche' was on October 1, 1990 with an average price of 7.51 pence per kWh being paid to renewable energy generators, the fifth and last was in September 1998 at an average of 2.71 pence per kWh.[1] Although the Renewables Obligation is now the Government’s main mechanism for expanding the renewables sector, the last of the existing orders will continue in effect until it expires in 2018.[1] Contracts resulting from the first two tranches however terminated in 1998, allowing generators from these rounds to now sell electricity under the new mechanism.


  • Background 1
  • Funding 2
  • Only Renewables 3
  • See also 4
  • References 5


The Non-Fossil Fuel Obligation was put in place under the powers of the Electricity Act 1989, under which electricity generation in the UK was privatised. The original intention was to provide financial support to the UK nuclear power generators, which continued to be state owned. The proposals were enlarged in scope before the Obligation was brought into operation in 1990 to include the renewable energy sector. Contracts from the last three rounds remain in place with the generators receiving the agreed amount from the NFPA and the NFPA effectively taking ownership of the Renewables Obligation Certificate (ROC) which the generator is entitled.


Funding for the NFFO was originally generated by the Fossil Fuel Levy, a levy placed on all electricity consumption in the UK. This was collected by Ofgem, which paid it to the Non-Fossil Purchasing Agency [2], a body created in 1990 by the public electricity suppliers to purchase on the supplier's behalf. The purchasing agency is based in Newcastle upon Tyne.

Since the introduction in 2001 of the New Electricity Trading Arrangements, electricity suppliers bid for the electricity and ROCs in competitive auctions held by the Non-Fossil Purchasing Agency, with any shortfall in price being funded by the Levy. As a result of these arrangements, the Non-Fossil Fuel Obligation has been generating a trading surplus, expected to have reached £500m by 2008. The Government have been criticised for siphoning off funds from this surplus to contribute to the exchequer, instead of using it to support renewable energy in other ways [3].

Only Renewables

In the past nuclear power was by far the greatest beneficiary of this system, and the associated fossil fuel levy was designed to support the nuclear power industry. The new emphasis is on promoting renewables, and nuclear power is no longer eligible.[2]

See also


  1. ^ "Non-Fossil Purchasing Agency Ltd & NFPAS Ltd - Average NFFO Prices". 
  2. ^
This article was sourced from Creative Commons Attribution-ShareAlike License; additional terms may apply. World Heritage Encyclopedia content is assembled from numerous content providers, Open Access Publishing, and in compliance with The Fair Access to Science and Technology Research Act (FASTR), Wikimedia Foundation, Inc., Public Library of Science, The Encyclopedia of Life, Open Book Publishers (OBP), PubMed, U.S. National Library of Medicine, National Center for Biotechnology Information, U.S. National Library of Medicine, National Institutes of Health (NIH), U.S. Department of Health & Human Services, and, which sources content from all federal, state, local, tribal, and territorial government publication portals (.gov, .mil, .edu). Funding for and content contributors is made possible from the U.S. Congress, E-Government Act of 2002.
Crowd sourced content that is contributed to World Heritage Encyclopedia is peer reviewed and edited by our editorial staff to ensure quality scholarly research articles.
By using this site, you agree to the Terms of Use and Privacy Policy. World Heritage Encyclopedia™ is a registered trademark of the World Public Library Association, a non-profit organization.

Copyright © World Library Foundation. All rights reserved. eBooks from Project Gutenberg are sponsored by the World Library Foundation,
a 501c(4) Member's Support Non-Profit Organization, and is NOT affiliated with any governmental agency or department.