Nuclear Politics

Financing New Nuclear / Is RAB Model The Right Way Forward?

By David Dalton
21 November 2018

21 Nov (NucNet): The UK government has confirmed it is exploring the “right ways” to finance new nuclear, including through potential government investment in the Wylfa Newydd nuclear power station on the isle of Anglesey in North Wales and a regulated asset base, or RAB, model for future projects.

Business secretary Greg Clark said in a speech on the future of the energy market that “if nuclear is sufficiently competitive, then it is worth, in my view, turning that option into a commitment.”

He said there has been “some criticism” of the prospective cost of the Hinkley Point C nuclear station project, but in its efforts to bring down costs the government is looking into financing options for new-build.

Mr Clark’s speech is the clearest indication yet that the government is open to RAB, essentially a type of contract drawn up with the backing of government which calculates the costs and profits of a project before it is started, and allocates an investor’s profits from day one.

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