Junior Energy Minister Richard Page claims the encouraging response reflects the enthusiasm and commitment of an emerging new industry. "The Non-Fossil Fuel Obligation is one of the world's toughest competitions for generators of electricity from renewables. Those who are successful will be well placed to participate in the rapid expansion of export markets," he claims.
Prospective generators were responding to an invitation to express an interest in bidding competitively into a total of seven renewable technology bands. This marks the start of the lengthy application process that will culminate in contracts being awarded by the Regional Electricity Companies to successful applicants in spring 1997. So far generators have only had to give the size and location of their project. They will need to give more detailed information during the course of this year before making firm price bids by January 15, 1997. Chances are, however, that if the pattern of previous NFFO rounds is repeated, around half of these projects will not proceed to the next round of the process.
In spite of the high interest in NFFO-4, the number of initial bids is down on the previous renewables order -- NFFO-3 -- when 1373 schemes were registered. Yet if anything this is a healthy sign. With the results of contracts awarded under NFFO-3 to go by, potential generators now have a clearer idea of what to expect from prices. This should lead to a more closely fought competition without the wide range of price bids seen in the previous round. Moreover, Page has made it clear that he expects prices to continue to converge with the market price for electricity.
The trend towards ever larger wind farms continues unabated, reflecting the move towards bigger projects for renewables as a whole. The total capacity of wind schemes registered for NFFO-4 is 1461 MW giving an average size of around 6.5 MW. Although it is understood that this figure is distorted by a few very large schemes, it is nonetheless almost double the average size of 3.3 MW for projects registered under the previous round.
There was also less interest than might have been expected in the smaller wind band which would allow higher priced contracts to small developments. Of the 227 wind schemes registered, only 63 are for less than 1.6 MW capacity -- the cut off point for the small-scale wind band in NFFO-3. In a further attempt to encourage genuinely small projects, the DTI has indicated that this time round the split point between the small and large bands will be less than 1.6 MW. Moreover, it has warned larger developers against trying to qualify projects for the smaller band by splitting sites or bidding in extensions to existing wind farms. The DTI hopes these measures will encourage small and community developments which may not otherwise be able to compete with larger players. Yet early signs indicate that few if any community-led initiatives are seizing the opportunity. "It remains to be seen if community schemes take advantage of NFFO-4. It is difficult to know what more we can do through NFFO," comments a DTI insider.