Download the full outcome
Detail of outcome
As set out in the Energy White Paper, the government will aim to bring at least one large-scale nuclear project to the point of final investment decision (FID) by the end of this parliament, subject to clear value for money and all relevant approvals.
Having assessed the consultation responses, the government believes that a RAB with the high-level design principles set out in the consultation remains a credible model for large-scale nuclear projects. Following the consultation, government will continue to explore a range of financing options with developers, including RAB. In particular, due to the challenges of raising the capital required for a new nuclear project as highlighted in the consultation, we will also continue to consider the potential role of Government finance during construction, provided there is clear value for money for consumers and taxpayers and subject to relevant approvals.
In response to comments from consultees who wanted more information on the specific design of the RAB model, the stated purpose of the consultation was to seek views on the high-level design principles of a RAB model and we consider that the level of information provided was appropriate for this purpose. Further details will be developed in discussion with developers of specific projects.
We are also considering whether a RAB model could be applied to other low carbon technologies, including transport and storage infrastructure for carbon dioxide (outlined in the government’s response to the carbon capture, usage and storage business models consultation), as well as small and advanced modular reactors (SMRs and AMRs).
Detail of feedback received
We received 104 responses from organisations.
Responses from industry were generally supportive of the proposed high-level design principles of the RAB model, with many seeing its potential to substantially increase private investment in nuclear as a tried and tested model in other major infrastructure projects.
Responses from members of the public who were not in principle opposed to nuclear were also supportive, highlighting potential for RAB to lower costs of financing, and in turn lower costs to consumers. They also welcomed the jobs that could be created as a result of facilitating new nuclear projects.
Responses from environmental groups and NGOs suggested that that new nuclear was unlikely to be value for money given the falling price of renewables and also cited RAB for nuclear as potentially providing preferential treatment to nuclear over renewables. Most of these groups were opposed to nuclear in principle, citing security concerns, risk of proliferation and waste management. However, these issues were outside the scope of the consultation.
We received over 9,000 responses from individuals. The majority of these individual responses contained very little substantive information, with many of them sharing the same content, often citing in principle opposition to nuclear and did not directly address the consultation questions or issues.
A small number of responses from individuals who focused on the consultation questions were negative, expressing concerns with construction phase consumer charging.
We also received a separate online petition with over 36,000 signatures requesting that RAB is not used to finance new nuclear projects.
In June 2018, the Secretary of State for Business, Energy and Industrial Strategy announced that the government would review the viability of a ‘Regulated Asset Base’ (RAB) model for new nuclear projects and committed in January 2019 to publishing an assessment of this model by the summer.
Our assessment has concluded that, by providing regulated returns to investors, a RAB model has the potential to reduce the cost of raising private finance for new nuclear projects, thereby reducing consumer bills and maximising value for money for consumers and taxpayers.
This consultation sets out the basis for our assessment and seeks views from interested parties on how a Nuclear RAB model could be implemented within the current energy system in a way that allows new nuclear to be built at low cost to consumers. It includes a set of suggested core principles that have resulted from our feasibility assessment, and considers important issues such as the possible approaches to risk-sharing under such a model.