Origin of NFPA
Under the 1989 Electricity Act, the Secretary of State made five Orders requiring the Regional Electricity Companies (RECs) in England and Wales to contract for certain amounts of electricity generating capacity from renewable sources. These Orders are known as Non-Fossil Fuel Orders or "NFFOs" for short.
NFPA was set up in 1990 by the twelve RECs as their agent for the purpose of enabling them to enter into collective arrangements to discharge their obligations under the Orders.
Contracts for the first two Orders made in 1990 and 1991 have now terminated. Contracts under the remaining three Orders will continue for several years, with the last such contract not terminating until 2018. The 1994 NFFO is for 141 contracts with a total capacity of 627MW, 1997 NFFO is for 195 contracts with a total capacity of 843MW and the 1998 NFFO is for 261 contracts with a total capacity of 1,177MW. [ view NFFO and SRO summary page ]
Similar orders were made in respect of the electricity companies in Scotland and Northern Ireland.
NFPA and NETA
The introduction of New Electricity Trading Arrangements (NETA) on 27 March 2001 and the 'split' in the REC Licence brought about a fundamental change in the way that the existing NFFO obligations would continue to be fulfilled.
The main difference in the role of NFPA is that it changed from being an agent to being the "buyer" and the existing Power Purchase Agreements with the generators were replaced with new contracts on similar terms. The 'Saving Arrangements' legislation required the replacement contracts to offer the same contract prices, indexation and contract duration. NFPA purchases the output from the generators at the contract price and sells the electricity to licensed electricity suppliers via on-line auctions. Surplus income from the process is paid to the Fossil Fuel Levy.
NFPA Scotland Limited
Since 1 April 2006, NFPA Scotland has been responsible for the operation of the contracts issued to generators under the three SROs. The 1994 SRO is for 30 contracts with a total capacity of 76.42MW, the 1997 SRO is for 26 contracts with a total capacity of 104.17MW and the 1999 SRO is for 53 contracts with a total capacity of 140.16MW. [ view NFFO and SRO summary page ]
Replacement Power Purchase Agreements
Replacement Power Purchase Agreements (RPPAs) must not be amended or assigned without consent from NFPA Ltd or NFPA Scotland Limited as appropriate. As part of the amendment procedure, confirmation will be sought from Ofgem that the contract, as amended, will remain a "qualifying arrangement"; it is only when all stages of the process have been completed that the amendment will become effective.
Under the Saving Arrangements Order for England and Wales, NFPA is the 'Nominated Person' and, under the Saving Arrangements Order for Scotland, the role is taken up by NFPA Scotland. The Orders require that the Nominated Person must conduct itself in relation to an auction in a manner so as to satisfy the Gas and Electricity Markets Authority (OFGEM) that it does not show any undue preference or exercise any undue discrimination in relation to any licensed electricity supplier.
The Orders further require that any person who owns or has an interest in NFPA/NFPA Scotland must not gain any advantage from his ownership or interest (except that expressly permitted by statutory instrument) in relation to the auction.
the next e-POWER auction
the next e-ROC auction
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