Nuclear RAB Charges: Technical Briefing for Businesses

Kieron Blundell

Executive Relationship Manager



From November 2025, UK electricity bills will include a new pass-through cost: the Nuclear Regulated Asset Base (RAB) charge. Established under the Nuclear Energy (Financing) Act 2022, this mechanism is designed to finance new nuclear generation capacity, beginning with Sizewell C.

Background and Rationale

The RAB model allows developers to recover revenue during both the construction and operational phases of infrastructure projects. This approach reduces the weighted average cost of capital (WACC) and helps mitigate the risk premiums traditionally associated with large-scale nuclear builds. Instead of deferring the entire financing burden to future consumers, the model distributes costs earlier and more evenly.

Although this is the first time the RAB model has been applied to nuclear in the UK, it is not without precedent. It has already been used to deliver significant projects such as Heathrow Terminal 5 and the Thames Tideway Tunnel. The government’s decision to extend the model to nuclear reflects three key objectives:

  • Security of supply: stabilising the UK’s energy mix with reliable baseload generation
  • Decarbonisation: meeting net zero commitments with 24/7 carbon-free output
  • Market resilience: reducing reliance on imports and limiting exposure to global wholesale volatility

Treatment on Electricity Bills

Electricity costs to end users can be broken down into two components: wholesale electricity and non-commodity costs. Wholesale charges reflect traded energy market prices, while non-commodity costs capture regulated charges, policy support, and network-related fees.

The Nuclear RAB charge will fall within the non-commodity cost (NCC) category.

The first published rate, confirmed by the Low Carbon Contracts Company (LCCC) on 12 August 2025, is £3.455/MWh, applicable from 1 November to 31 December 2025. These rates will be updated on a quarterly basis and are expected to increase progressively as construction of Sizewell C advances.

Suppliers have indicated that existing fixed contracts will not be retrospectively adjusted to incorporate the new charge. However, renewals and pass-through contracts agreed from winter 2025 onwards are likely to include RAB charges as a standard element of billing.

Implications for Consumers

For businesses, the introduction of RAB charges has several immediate and longer-term implications. First and foremost, there are budgeting considerations. Organisations with high electricity consumption will see incremental increases in non-commodity costs, which may compound over successive RAB periods.

Contract structuring will also play a significant role in determining when and how exposure occurs. Pass-through arrangements are expected to reflect RAB charges earlier and more directly, while fully fixed agreements may defer costs until renewal. As such, procurement teams will need to weigh the benefits of near-term price certainty against longer-term flexibility.

Finally, the importance of risk management cannot be overstated. Incorporating RAB into cost forecasts, forward-fixing where appropriate, and maintaining robust invoice validation processes will be critical in ensuring businesses are not caught out by either unexpected charges or billing errors.

Strategic Considerations

In light of these implications, businesses should take a proactive stance in preparing for the RAB mechanism. Four areas in particular merit attention:

Portfolio Review

Understanding your exposure begins with a comprehensive review of contract types, consumption levels, and renewal timelines. This will highlight where RAB charges are most likely to impact and provide a basis for future strategy.

Procurement Strategy

Deciding between fixed and pass-through options will become increasingly complex. A fixed position may provide short-term insulation from RAB costs, while flexible frameworks allow for dynamic response but require more active management and risk tolerance.

Invoice Validation

Pass-through charges can be misapplied, and errors in supplier billing are not uncommon. Rigorous validation is essential to ensure that RAB costs are recovered accurately and transparently, preventing unnecessary expense.

Demand Reduction

Ultimately, the most reliable way to reduce exposure to rising non-commodity costs is to reduce consumption. Demand-side management, energy efficiency initiatives, and flexibility services can all play a role in offsetting the impact of new charges.

What We’re Doing About It

At an operational level, the Nuclear RAB charge has already been incorporated into our internal processes. This includes adjusting invoice validation and accrual methodologies to ensure charges are accurately captured, and embedding the cost into our procurement frameworks so that future agreements remain robust. We are maintaining an active dialogue with suppliers, industry regulators, and relevant stakeholders to ensure that the information we provide to clients is aligned with the latest market intelligence. 

In parallel, RAB considerations are now factored into tender evaluations and contract strategies, ensuring our clients’ future positions fully reflect this additional non-commodity cost.

The Nuclear RAB charge represents a structural change in how the UK funds energy infrastructure. Its immediate cost may appear marginal, but its cumulative effect will be significant. By embedding RAB considerations into procurement planning, budget forecasting, and invoice validation, businesses can mitigate risk and maintain greater control over future energy expenditure.

Jargon Buster

Regulated Asset Base (RAB)

A way of paying for big projects, like nuclear power stations, by adding a small extra charge to electricity bills while the project is still being built.

Sizewell C

The new nuclear power station being built in Suffolk. Once finished, it will provide low-carbon electricity for around six million homes.

Weighted Average Cost of Capital (WACC)

A technical term for the overall cost of borrowing money to fund a project. The lower it is, the cheaper the project becomes.

Non-Commodity Costs (NCCs)

The extra charges on your bill that aren’t the energy itself; things like taxes, levies, and government schemes.

Pass-Through Contract

An energy contract where any new government charges (like RAB) are passed straight through to you when they’re introduced.

Fixed Contract

An energy contract where your costs are locked in for the length of the deal. This means you won’t see new charges until your contract is up for renewal.

Low Carbon Contracts Company (LCCC)

The government body that sets and manages certain energy charges, including the RAB.

Need Help?

The new Nuclear RAB charges are another layer of complexity in an already shifting energy market. You don’t have to face them alone.

At EIC Partnership, we can help you:

  • Review contracts for upcoming pass-through exposure.
  • Shape procurement strategies that balance cost control with future flexibility.
  • Validate invoices to ensure charges such as RAB are applied correctly.

With nearly a century of combined energy and carbon expertise, we give you the clarity and confidence to make informed decisions.

Get in touch with us today to discuss how these changes could affect your portfolio.

With a century of combined experience in carbon and energy strategy, EIC Partnership is here to help you manage today and plan for tomorrow.

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