Regulated Asset Base (RAB) Model For Nuclear

In June 2018, the Secretary of State for Business, Energy and Industrial Strategy announced that the Government would review the viability of a ‘Regulated Asset Base’ (RAB) model for new nuclear projects and committed in January 2019 to publishing an assessment of this model by the summer.

The Government’s assessment has concluded that, by providing regulated returns to investors, a RAB model has the potential to reduce the cost of raising private finance for new nuclear projects, thereby reducing consumer bills and maximising value for money for consumers and taxpayers.

A consultation has been announced that sets out the basis for this assessment and seeks views from interested parties on how a Nuclear RAB model could be implemented within the current energy system in a way that allows new nuclear to be built at low cost to consumers. It includes a set of suggested core principles that have resulted from our feasibility assessment, and considers important issues such as the possible approaches to risk-sharing under such a model.

Commenting, CECA chief executive Alasdair Reisner said: “If we are to decarbonise our energy and transport infrastructure, we expect that the UK will need to deliver further generation capacity through new build nuclear projects, above and beyond that already under construction at Hinkley Point C.

“We recognise that current approaches to funding and finance have not offered a sustainable solution to support such large investments. As such, we welcome the proposal to consult on a RAB-based approach, which has already demonstrated its success elsewhere in the infrastructure sector.”