Analysis

UK New Build / CfD Or RAB? The Key Differences Explained

By David Dalton
1 August 2019

CfD Or RAB? The Key Differences Explained
The CfD deal with EDF for Hinkley Point C was criticised for being agreed behind closed doors for a price that is too high.
RAB models of the kind being considered in the UK differ from the contract-for-difference (CfD) approach most significantly in relation to the timing of payments to the developer.

CfD-supported projects will only receive revenue payments on successful commissioning of a nuclear plant, which can be a decade or more after construction begins. This means the up-front development costs – which run into the billions for nuclear projects – and construction costs have to be funded by the project developer and its investors.

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