Latest Changes to the UK Nuclear Regulated Asset Base (RAB) Scheme
Following our earlier publication on the introduction of Nuclear RAB (Regulated Asset Base) Levy, this update outlines the latest announced changes to the scheme and what they mean for non-commodity costs in the UK electricity market.
What is the Nuclear RAB
The Nuclear Regulated Asset Base (RAB) is a scheme introduced to fund new domestic nuclear generation projects, supporting their planning, construction, and operating stages.
The funding is provided throughout the course of the project’s timeline rather than beginning when the site starts producing electricity, giving developers a level of financial security they would otherwise not have. Currently, this scheme has only been used to support the development of the Sizewell C nuclear power station, though future projects are also expected to benefit from this scheme.
Why was the Nuclear RAB Established?
Nuclear fission power stations have multiple significant advantages: a stable and adjustable power supply, low greenhouse-gas emissions, relatively low running costs and highly energy-dense fuel.
However, they also face two significant challenges: long construction timelines and high up-front costs. Together, these two issues pose a substantial entry barrier for potential developers. Nuclear power stations are heavily regulated with strict requirements and tight tolerances on construction and safety systems. Overcoming these demands requires considerable time and investment: often more than a decade and tens of billions of pounds.
Previously, this risk fell almost entirely on the developer, as seen with the development of the Hinkley Point C site. The withdrawal of major private developers from other UK projects for the same reason reinforces this point, most notably when Hitachi exited the Wylfa Newydd project in Wales in 2020, leading to the cancellation of the 2.7 GW project.
Despite these challenges, the advantages of nuclear generation are too significant to ignore, particularly for a government focused on energy security. To address this, the Nuclear RAB scheme was introduced, providing developers with a regulated stream of funding during the early stages of a project, when financing costs are at their highest. This structure helps make large-scale nuclear investment more realistic for private capital.
How the Nuclear RAB is Funded and Recent Changes
The funds paid to participating nuclear developers are collected from energy suppliers by the Low Carbon Contracts Company (LCCC), and the scheme is regulated by Ofgem. Currently, the only active Nuclear RAB charge is the Operational Cost Levy, set at 0.00028 p/kWh. This is a small charge introduced solely to cover the administrative costs of running the scheme.
The first of the main levies, the Interim Levy Rate, was originally scheduled to begin on 1 November 2025, at a rate of 0.345 p/kWh. However, the LCCC recently announced that the introduction will be delayed by one month, to 1 December 2025, and the rate increased to 0.354 p/kWh. From January 2026 onward, the levy will follow a quarterly update schedule, with the first adjustment raising it to 0.3721 p/kWh.
The LCCC has published the full list of 2026 rates, shown below:
| Period | Interim Levy Rate (p/kWh) |
|---|---|
| 2026 Q1 | 0.3721 |
| 2026 Q2 | 0.4815 |
| 2026 Q3 | 0.4824 |
| 2026 Q4 | 0.3808 |
At least one additional cost element is planned: The Total Reserve Amount (TRA). This will act as a reserve fund available to LCCC to ensure it can meet its funding obligations even if levied suppliers underpay or default on their Interim Levy Rates. Details on this charge remain limited, and no further cost components have been referenced in LCCC publications to date. These points of ambiguity will likely be resolved through future updates as the scheme progresses.
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