What is the Nuclear RAB Levy?
And what does it mean about the UK’s evolving energy policy?
From 1 December 2025, a new government-mandated charge called the Nuclear Regulated Asset Base (RAB) Levy will be applied to many UK electricity bills. While the levy itself is modest, it represents a much wider shift in how the UK is financing big energy infrastructure projects, particularly nuclear.
For organisations keeping a close eye on energy policy, system costs, and long-term price drivers, the Nuclear RAB Levy is more than a billing line: it’s a signal of where the UK’s energy strategy is headed.
What is the Nuclear RAB Levy and why is it being introduced?
The Nuclear RAB Levy is a new charge that – in line with government regulations – electricity suppliers operating in Britain are required to pay. It’s designed to help fund the construction of new nuclear power stations.
Rather than waiting until a plant is generating electricity, the RAB model allows developers to recover some costs during construction. This early revenue stream is designed to reduce financing risk and attract investment into long-term nuclear projects.
The first project funded under this model is Sizewell C in Suffolk, with the scheme regulated by Ofgem and administered by the Low Carbon Contracts Company, which collects payments from all suppliers on behalf of the government.
Why is nuclear back on the policy agenda?
The RAB Levy sits within a much broader political shift to re-establish nuclear as a central pillar of the UK’s long-term, low-carbon energy mix. As electricity consumption rises across almost every sector – from heat and transport electrification to the rapid growth of AI-driven computing – government is looking to expand the supply of firm, low-carbon power that can reliably meet winter peaks alongside renewables.
Energy independence has also become a priority, with nuclear positioned alongside renewables, storage and flexibility solutions to reduce reliance on imported gas. Whether organisations agree with nuclear expansion or not, it is clear that the government views it as essential for delivering Net Zero while maintaining long-term grid stability.
Why is this model being employed?
Traditionally, nuclear power in the UK has been financed using Contracts for Difference (CfDs), the same mechanism used for renewables. But nuclear projects are far larger, longer, and riskier to finance.
The RAB model changes this by:
- Shifting some construction-phase risk to consumers, making financing cheaper
- Providing earlier, predictable cashflow to project developers
- Reducing reliance on high government guarantees
- Preventing cost overruns from falling entirely on investors
In practical terms, this approach lowers the cost of capital for nuclear projects – a major barrier historically. For the energy market, this represents a move toward the financing structure used for regulated utilities like water networks and transmission grids.
What does this means for organisations?
While the levy itself is modest, it has wider implications for organisations focused on cost forecasting, sustainability strategy and energy procurement.
1. Policy-driven system costs
The RAB Levy may be part of a wider trend: as the UK accelerates decarbonisation, more infrastructure costs (nuclear, networks, flexibility, resilience upgrades) are likely to be recovered through regulated charges.
The introduction of the RAB model may indicate a gradual move towards more regulated, policy-linked cost mechanisms as the UK expands low-carbon infrastructure. As the energy transition accelerates – encompassing nuclear, offshore wind, grid modernisation, flexibility platforms and resilience upgrades – the government may increasingly rely on regulated frameworks to finance essential assets.
2. The generation mix will diversify
Over the next decade, businesses are likely to operate within a power system shaped by an increasingly diverse portfolio of renewables, long-duration storage, demand flexibility services and new nuclear. The aim of this mix is to support reliability as variable renewable generation grows. For organisations, this may gradually influence wholesale market behaviour, seasonal pricing patterns and future contract types.
3. Growing electrification pressures
As industries electrify heating, fleets and industrial processes, demand for stable, low-carbon electricity will increase. Nuclear is intended to complement renewables by supporting baseload stability during this transition. For organisations planning large-scale electrification, understanding how supply-side developments fit into long-term policy direction can help shape energy roadmaps, sustainability commitments and internal investment decisions.
4. Long-term price stability becomes more important
With more infrastructure being delivered through regulated approaches, a larger share of an organisation’s electricity costs may gradually shift from wholesale volatility to more stable, policy-determined components. As a result, many businesses may find value in exploring long-term procurement tools – such as corporate PPAs, onsite generation, or structured fixed-price agreements to enhance budgeting certainty and reinforce sustainability outcomes.
Our fuel mix isn’t changing
Although nuclear energy is a low-carbon source of power, it’s not part of Good Energy’s renewable mix. The levy does not reflect any change in how we generate or buy your electricity.
We continue to source our electricity exclusively from 100% renewable generation – wind, solar, hydro and bioenergy – supplied by over 3,000 independent generators across Britain.
The funds collected through this levy will be passed directly to the government’s scheme administrator, without any markup or profit. Good Energy will not retain or benefit from these charges in any way.
