As the UK moves towards its Net Zero 2050 goals, the way large-scale energy projects are funded is changing. One of the biggest developments is the introduction of the Nuclear Regulated Asset Base (RAB) Levy, a new charge that will appear on business energy bills from late 2025.
This guide explains what the levy is, when it starts, and what it means for UK businesses.
What Is the Nuclear RAB Levy?
The RAB model is a government-backed funding framework designed to help attract private investment into major infrastructure projects such as nuclear power stations.
Traditionally, developers only recovered costs once a plant began generating electricity. Under the RAB model, investors receive regulated returns during construction. This lowers financing costs, reduces investor risk, and speeds up project delivery — supporting the UK’s long-term energy security and low-carbon transition.
The Nuclear RAB Levy applies this model specifically to the UK’s nuclear programme, ensuring critical projects like Sizewell C can progress more efficiently.
How the Levy Works
All licensed electricity suppliers in the UK will contribute to the levy, based on their market share. These payments will be managed by the Low Carbon Contracts Company (LCCC) through a mechanism called a Supplier Obligation, similar to how existing CfD and Capacity Market charges operate.
Suppliers will then pass these costs on to end-users as a non-commodity line item on electricity invoices.
Two charges make up the Nuclear RAB Levy:
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Interim Levy Rate (ILR) – the main charge that funds the construction of new nuclear projects such as Sizewell C.
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Operational Cost Levy (OCL) – a much smaller administrative charge that covers the costs of running the scheme.
Implementation Timeline
The LCCC has confirmed the following dates and rates for the scheme’s launch:
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Operational Cost Levy (OCL): 0.00028 p/kWh - effective from 1 October 2025 (covers administration costs)
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1 November - 30 November 2025: ILR 0.3455 p/kWh
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1 December - 31 December 2025: ILR 0.3540 p/kWh
The levy officially takes effect from 1 November 2025, with active charges beginning in December.
Forecasts suggest rates may vary between 0.0350 p/kWh and 0.0450 p/kWh up to March 2027 as construction advances and funding requirements evolve.
If you have any questions relating to RAB reach out via the usual channels or Contact Us
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