The UK Government is set to introduce a new Nuclear Energy (Energy ) Bill that will pave the way for using the Regulated Asset Base (RAB) model on nuclear projects, bringing projects such as Sizewell C a step closer.
Seen in the industry as a way to funnel private financing for infrastructure projects, the model is seen as an “attractive alternative” for the government as the “burden on consumers is much lower over the life of the plant whilst helping to attract private sector investment into nuclear projects.”
According to recent reports, the UK Government is exploring ways to buy out Chinese developer CGN from its nuclear projects – with the RAB model supposed to help in “reducing the UK’s reliance on overseas developers”.
According to government estimates, using the RAB model will save up to £80bn compared to using the Contract for Difference financing mechanisms used on Hinkley Point C.
Spreading costs to consumers over a long period to fund the projects, the government describes the model as “tried and tested”, having been used a number of high profile projects in the UK already, including Thames Tide Way and Heathrow Terminal 5.
Brought forth by the Department of Business, the bill is currently at its first reading in the House of Commons.