A change in rules for financing new nuclear capacity leaves trading platform Elexon preparing to play a key role in supporting expansion of the industry, including Sizewell C, pictured.
Through its Electricity Market Reform Settlement (EMRS) division, Elexon will now administer a levy to fund the government’s nuclear Regulated Asset Base (RAB) approach.
Nuclear advocates say the industry’s expansion is critical if Britain is to reach Net Zero by 2050.
Last month power ministry D-ESNZ authorised a change to the Balancing and Settlements Code, which administers regulated payments made between licensed suppliers. From 29 February, EMRS can for the first time perform the new role of RAB settlement services provider to Britain’s nuclear generators.
The change is authorised by the Nuclear Regulated Asset Base Model (Revenue Collection) Regulations, which came into force in March last year. A new direction widened cross-subsidy powers, allowing nuke developers such as EdF to receive funding from all licensed electricity suppliers, for purposes of funding new reactors.
RAB payments to relevant nuclear developers would be funded by all Britain’s licensed electricity suppliers. Elexon’s EMRS was made responsible for delivering processes to calculate each supplier’s payments and collecting the funds they owe, according to each supplier’s market share.
Elexon’s EMRS will do so on behalf of a revenue collection counterparty, the Low Carbon Contracts Company (LCCC). The LCCC is an arms-length government agency, which will make the payments to the relevant nuclear companies.
Elexon chief executive Peter Stanley, said: “Elexon is a trusted, independent delivery partner for LCCC, government and Ofgem. We are pleased to be supporting the nuclear RAB scheme, which will play an important part in encouraging development of the low carbon generation GB needs to meet Net Zero.
“We have significant experience in delivering support schemes such as this, as since 2015 we have been successfully delivering similar functions to support suppliers’ funding of the Contracts for Difference (CfD) and Capacity Market schemes.”
