Overview
On 31 March 2022, the Nuclear Energy (Financing) Act (the Act) received Royal Assent. The Act provides the legislative framework to implement a Regulated Asset Base (RAB) model to fund new nuclear energy generation projects.
The Low Carbon Contracts Company Limited (LCCC), as the Revenue Collection Counterparty under Nuclear RAB, has appointed Elexon (who will fulfil the role via its subsidiary, EMR Settlement Limited (EMRS)) as the RAB Settlement Services Provider.
To support the Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023, EMRS have implemented the new functionality to our systems and the associated processes to support the settlement activities for this scheme.
The Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023 largely replicate the provisions of the Contracts for Difference (CfD) revenue regime set out in the Contracts for Difference (Electricity Supplier Obligations) Regulations 2014 (as amended).
All Suppliers will be required to fund (based on market share) the Nuclear RAB arrangements through the Supplier Obligation. The funding will be based on market share similar to the existing CfD scheme.
The sections below provides further information to support Suppliers understand the scheme and also the background.
Supporting Information
Suppliers will be required to make the following payments once the Nuclear RAB scheme becomes operational:
- Interim Rate payments
- Reserve payments
- Reconciliation payments
- Operational Costs Levy
Also, the regulations detail the Credit Cover requirements for Suppliers. The above payments and Credit Cover are calculated in the same manner as the CfD scheme.
What are the key differences to highlight for the Nuclear RAB scheme for Suppliers?
We have summarised the key differences related to the activities EMRS support as follows:
- Interim Levy Rate and Total Reserve Amount will be determined at least 30 days prior to the quarter for which it is being set.
- Supplier’s Reserve Amount is notified at least 8 WDs after 30 calendar days in advance of the quarter.
- Quarterly Reconciliation offsets the payments from Suppliers against a single RCC payment
- Suppliers will only receive backing data in T-files
What would be an example timeline once the scheme is operational?
We have provided an example timeline to illustrate the initial activities EMRS will support. The below timeline illustrates the Interim Levy Rate and Total Reserve Amount is determined at least 30 days prior to the quarter for which it is being set. EMRS will issue out the notification to Suppliers to confirm these amounts.
The payments will start with the Interim Levy Payments as this commences once II Settlement Data is received and Operational Costs Levy will be included into the invoices once SF Settlement Data is received.
What Backing Data will Suppliers receive for Nuclear RAB?
Suppliers will receive backing data via T-files in CSV format and this will be emailed and available via My EMRS to download.
The new T-files are:
- T201 – Daily Supplier RAB
- T202 – RAB Supplier Reserve Amount
- T204 – RAB Quarterly Reconciliation
- T205 – RAB Mutualisation
- T206 – RAB Operational Cost Refund
- T218 – RAB Supplier Daily Minimum Credit Cover Report
- T300 – RAB Supplier Late Payment Interest
- T302 – RAB Supplier Mutualisation Repayment
To view the CSV format and data items includes, please refer to the Interface Definitions Documents webpage.
Where can Suppliers locate further information to support them on Nuclear RAB scheme?
The Stakeholder Support for Suppliers – Nuclear RAB webpage supports Suppliers in understanding the requirements for this scheme, any activities (e.g. lodging Credit Cover) and any associated timescales. This webpage also consolidates which Working Practices and Guidance documents a Supplier would require.
Government Consultations
Below we have included the links to consultations that have aided in the implementation of the legislations and the required modifications to the Balancing and Settlement Code (BSC).
In 2022, the Government consulted on the Revenue stream for the nuclear RAB model and the details of this consultation are available here, on the government website. This supports the approved legislation that came into force on 23 March 2023, here’s a link to the regulations; Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023.
In October 2023, the Secretary of State issued out a consultation on Nuclear Regulated Asset Base (RAB): Industry Code and Licence Modifications. The consultation was seeking views on modifications proposed to the BSC:
- to establish EMRS as the Settlement Services Provider to carry out Nuclear RAB settlement functions (for example, to calculate and settle supplier payments) on behalf of the revenue collection counterparty, the LCCC
- to ensure EMRS and the revenue collection counterparty receive the BSC data that they need to carry out their functions
The amendments to the BSC are for the purpose of providing Elexon (and therefore EMRS) with the authority under the BSC to perform the Settlement Services Provider role for nuclear RAB. In performing this role, EMRS will be using existing open BSC data to settle the Suppliers payments on behalf of the Revenue Collection Counterparty.
The government response to the consultation on Nuclear RAB industry code and licence modifications has been published here, on the government website.
On 22 February 2024, the Secretary of State directed that the required changes to the BSC become effective on 29 February 2024. There is a link the ‘DESNZ direction to enable Elexon to perform the Nuclear RAB Settlement Services Provider role and for Elexon to provide relevant data to the Nuclear RAB Settlement Services Provider’.
Documentation
As part of the implementation for Nuclear RAB we have updated the following documents:
Working Practices
- WP1 – Overview of Settlement
- WP21 – Supplier Registration
- WP25 – Aggregation Rules
- WP41 – Late Payment Procedure
- WP42 – Supplier CFD and Nuclear RAB Credit Cover
Guidance
- G2 – Calculation of Supplier Demand
- G3 – CfD and Nuclear RAB Reserve Payments
- G4 – EMR and Nuclear RAB Settlement Authorisations
- G13 – Defaulting Missing Data
- G14 – Supplier CM Credit Cover
- G15 – CM Supplier Payments
- G16 – Supplier CfD and Nuclear RAB Payments
- G25 – My EMRS User Guide
Interface Definition
- T-File-CSV-Format-Backing-Data
- E Number Item Definitions
Implementation
EMRS have implemented the new functionality to our systems and the associated processes to support the settlement activities for this scheme.
LCCC is working with both DESNZ and Ofgem to ascertain the exact date the Nuclear RAB scheme will commence for Suppliers.