UK passes new nuclear financing model

New reactors to be financed during construction phase via regulated asset base model

The UK parliament has passed a bill to introduce a new regulated asset base (RAB) model for financing the construction of new nuclear energy projects. While contracts for difference (CfD) provide a subsidy for power generation once the plant is up and running, under RAB the government will pay a fixed return during the construction phase. For nuclear power plants, where construction schedules can run into the decades, this could incentivise private investment by lowering construction risk. Construction risk was blamed for the cancellation of at least two recent nuclear projects by Japanese conglomerates Hitachi and Toshiba. The RAB model places costs for new nuclear capacity onto energy bill