Sizewell C Economic Guidance
- Content:
- Guidance
- Publication date:
- Topic:
-
Low carbon and nuclear energy
- ➞ Nuclear Regulated Asset Base (RAB) model
- Industry sector:
- Generation and Wholesale Market
Outlines the way we will approach the regulation of Sizewell C, which is the first nuclear power station in the UK set to be funded through a Regulated Asset Base (RAB) model.
Details
The RAB model is designed to enable the recovery of revenue which Ofgem will regulate. More information on the RAB model is available from the Department for Energy Security and Net Zero (DESNZ). This guidance should be read alongside the electricity generation licence for Sizewell C and the special modifications set out by DESNZ in the Nuclear Regulated Asset Base (RAB) Licence. It explains Ofgem’s approach and the principles it expects to use when making decisions that affect the nuclear licensee, and where to find more information. This document updates the draft Economic Guidance published on 6 November 2023.
In April 2024, Ofgem commissioned an external ‘beta study’ from Cambridge Economic Policy Associates (CEPA) in recognition of the potential consumer benefits from Ofgem providing further indicative guidance to possible investors at that stage of the equity raise process. This report is published alongside the Economic Guidance. It sets out information such as CEPA’s analysis of the risks the nuclear licensee is exposed to, relevant comparators and how these factors could influence the asset beta range. The report should not be considered as a determination made by Ofgem or a view based on Ofgem’s own analysis or decision-making processes. The report is based on the November 2023 draft version of the licence which was published as a part of the DESNZ Sizewell C licence consultation. Wherever information in this report contradicts information in the Nuclear Regulated Asset Base (RAB) Licence, the licence text should be regarded as authoritative.