The purpose of Nuclear Regulated Asset Base (RAB)
To achieve the Governments goal to end the UK’s contribution to global warming by 2050, it’s clear that electricity generation must come from low-carbon sources by 2035. The purpose of the Nuclear RAB model is an option to fund future nuclear projects.
On 31 March 2022, the Nuclear Energy (Financing) Act (the Act) received Royal Assent. The Act provides the legislative framework to implement a RAB model. For an explanation of the RAB model in more detail please visit the government website.
The first Nuclear RAB site is Sizewell C. To keep up to date with latest news from Sizewell C please click here.
How does the Revenue Collection for this scheme work?
The revenue mechanics for the Nuclear RAB model largely replicates the provisions of the Contracts for Difference (CfD) revenue regime set out in the Contracts for Difference (Electricity Supplier Obligations) Regulations 2014 (as amended).
The Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023 details the obligations on electricity Suppliers who are required to fund this scheme.
On a daily basis, Suppliers will make the following payments:
- Interim Rate payments
- Operational Costs Levy
On a quarterly basis, Suppliers will make the following payments:
- Reserve payments
- Reconciliation payments
Suppliers are required to maintain Credit Cover to cover Interim Rate payments, Reserve payments, Reconciliation payments and Mutualisation payments. Credit Cover is calculated in the same manner as the CfD scheme.
Our role in the scheme
The Low Carbon Contracts Company Limited (LCCC), as the Revenue Collection Counterparty under Nuclear RAB, has appointed us as the RAB Settlement Services Provider.
Our role is to operate the systems and processes that enable the revenue collection mechanics for electricity Suppliers.
This includes:
- Maintain the settlement systems
- Calculate payments
- Invoice and collect payments
- Manage settlement of payments
- Manage Credit Cover
Our Stakeholder Support for Nuclear RAB Suppliers webpage details the purpose of the individual payment mechanisms, and will take you through each operational process involved in the scheme:
