From December 2025, a new charge began appearing on UK business electricity bills. This is the Nuclear Regulated Asset Base levy, or Nuclear RAB levy, and it helps fund the construction of new nuclear power stations, starting with Sizewell C on the Suffolk coast.
The levy is set every three months by the Low Carbon Contracts Company (LCCC), and the whole scheme is overseen by Ofgem, the UK energy regulator.
This guide explains what the levy is, why it exists, what you’ll see on your bill, and what businesses should do next. It will also detail steps to manage the impact on business energy bills, energy costs, and unit rates in 2026.
Speak to an energy expert todayWhat is the Nuclear RAB Scheme?
Building a nuclear power station takes years and costs billions. Instead of waiting until the plant starts producing electricity, the government now allows developers to receive small, regulated payments during construction. This helps lower their financial risk and keeps long‑term costs down.
Sizewell C is the first project using this approach.
The government introduced the RAB model to encourage private investment in nuclear energy, reduce financing costs, and spread the cost of construction more evenly across the years before the station begins generating power.
What this means for businesses: this shift means businesses now contribute to nuclear project costs much earlier than before, adding a new non‑commodity charge to bills throughout the construction phase.
As a result, electricity costs may rise in the short term and may fluctuate each quarter, even though the intention is to reduce the long‑term cost of delivering low‑carbon power once Sizewell C begins generating.
Talk to an Energy ExpertWhat exactly appears on my bill?
This will depend on your contract structure.
- Pass‑through contracts: expect a separate line for Nuclear RAB on your invoice. Suppliers bill using LCCC’s published rates and then perform quarterly reconciliations against actuals.
- Fixed‑price contracts: most suppliers embed the levy cost within your unit rate rather than showing a separate line, although this can vary by supplier.
EII exemption: Sites with valid Energy Intensive Industries (EII) exemption certificates do not pay the Nuclear RAB levy at eligible locations. This exemption is designed to protect businesses where electricity costs form a significant proportion of overall production costs.
Energy Intensive Industries are typically manufacturing sectors such as steel, chemicals, cement, paper, glass, and metals. These industries rely on large volumes of electricity, face international competition, and are more exposed to policy driven non commodity charges on electricity bills.
To qualify for the exemption, businesses must hold a valid EII certificate issued by the Department for Business and Trade. Eligibility is based on both sector classification and a financial test, which assesses whether electricity costs account for at least 20 percent of Gross Value Added.
If your business operates in an eligible sector, it is important to ensure your EII certificate is current and correctly applied to all relevant supply points so that the exemption is reflected in supplier billing.
When did the levy start?
The levy was originally due to start in November 2025, but the go‑live date was pushed back slightly to 1 December 2025. Because this reduced the time available to collect the required funds, the ILR for December was set slightly higher to compensate.
How the Nuclear RAB levy is calculated
The levy has three components, set or referenced by LCCC under the Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023:
- Interim Levy Rate (ILR), £/MWh, set quarterly. This is the main charge.
- Total Reserve Amount (TRA), a reserve pot to cover potential supplier defaults, set quarterly.
- Operational Costs Levy (OCL), a smaller £/MWh rate to fund scheme administration. The OCL is £0.0028/MWh.
LCCC publishes ILR and TRA typically 30 days before the quarter, and suppliers calculate Credit Cover requirements using the applicable ILR and a defined metered volume reference period.
If collections fall short due to defaults above thresholds, mutualisation is triggered, and other suppliers contribute additional funds that can be passed through to customers on a quarterly basis.
What exactly appears on my bill?
What you see depends on your contract type.
Pass‑through contracts
If you are on a pass‑through contract, you will see a separate line labelled something like “Nuclear RAB” on your invoice. Suppliers use the official LCCC rates to bill you and then carry out quarterly reconciliations to ensure the correct amount has been charged.
The first costs appeared on invoices in January 2026 for electricity consumed in December 2025, with the first reconciliation taking place by the end of April 2026.
Fixed‑price contracts
Most suppliers do not list the levy separately for fixed contracts. Instead, it is generally included within your unit rate, although suppliers may handle this differently.
EII exemption
Businesses that qualify for the Energy Intensive Industries (EII) exemption, and hold a valid certificate, do not pay the levy at eligible sites. It is important to ensure your certificate is up to date.
How the Nuclear RAB levy is calculated
The levy is made up of three parts, all set by LCCC under the Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023:
Interim Levy Rate (ILR)
This is the main charge, set in £/MWh. It changes every quarter and reflects the expected cost of funding Sizewell C for that period.
Total Reserve Amount (TRA)
This is a financial buffer set every quarter. It protects the scheme if any suppliers do not meet their payment obligations.
Operational Costs Levy (OCL)
This is a very small charge in £/MWh to cover the administrative costs of running the scheme. For the current year, the OCL is £0.0028/MWh.
LCCC normally publishes ILR and TRA values around 30 days before the quarter begins. Suppliers then use these figures to calculate what they must collect through bills, as well as how much Credit Cover they must hold.
If some suppliers fail to make the required payments and the shortfall goes beyond a predetermined threshold, mutualisation occurs. This means remaining suppliers contribute additional funds, which may then be passed through to customers.
Latest confirmed rates (prices as of March 2026)
These figures replace earlier forecasts and should be used in your budgets and energy planning.
- December 2025: ILR £3.494/MWh; TRA £8,307,825.45
- Q1 2026 (1 January – 31 March 2026): ILR £3.663/MWh; TRA £17,967,925.87
- Q2 2026 (1 April – 30 June 2026): ILR £4.683/MWh; TRA £19,092,336.26
- Operational Costs Levy: £0.0028/MWh for the current charging year
Industry updates suggest the ILR may fluctuate between £3.50 and £4.50/MWh throughout 2026 and 2027. Because of this quarterly variation, businesses should regularly check the LCCC dashboard before finalising budgets.
What does this mean in p/kWh?
A simple conversion:
- £1/MWh = 0.1 p per kWh
Using the confirmed Nuclear RAB rates:
- £3.663 per MWh is equivalent to approximately 0.3663 p per kWh
- £4.683 per MWh is equivalent to approximately 0.4683 p per kWh
These figures represent only the Nuclear RAB levy. They do not include VAT, network charges, other policy levies, or wholesale electricity costs.
To put this into context, at a rate of £3.663 per MWh, businesses pay around 0.3663 p per kWh to help fund the construction of nuclear projects such as Sizewell C. A small business using 10,000 kWh of electricity per year would therefore see an additional cost of around £36.63 annually. Larger consumers will pay proportionally more based on their electricity usage.
Talk to an Energy ExpertHow the levy interacts with the wider energy transition
The Nuclear RAB levy is one of several policy costs built into electricity bills as the UK transitions to a low‑carbon energy system. It sits alongside measures such as:
- Contracts for Difference (CfD),
- Capacity Market payments,
- environmental and decarbonisation schemes.
Nuclear power is seen by both the Government and Ofgem as a reliable low‑carbon energy source that supports renewable technologies like wind, solar, and biomass. The idea is to create a stable foundation for the UK’s Net Zero strategy.
At the same time, industry evidence shows that non‑commodity costs are becoming a larger share of business electricity bills. For this reason, effective budgeting and energy management are more important than ever.
Practical actions for UK businesses
Check contract mechanics
- If you have a pass‑through contract, include the Q2 2026 ILR of £4.683/MWh in your forecasts for April to June and prepare for quarterly reconciliations.
- If on a fixed contract, check with your supplier whether the levy has been built into your unit rate and whether any adjustments will apply.
Update budgets and credit facilities
Incorporate the latest ILR and TRA figures into your non‑commodity cost planning, and make sure finance and procurement teams understand how Credit Cover works so they can anticipate changes.
Reduce exposure through efficiency and on‑site generation
Lowering consumption reduces the proportion of costs that come from levies. Consider:
- improving energy efficiency,
- reviewing equipment settings and processes,
- using on‑site renewable options like solar panels,
- purchasing backed green energy products such as Renewable Energy Guarantees of Origin (REGOs).
Verify EII status
If you operate in an eligible sector, ensure your EII certificate is valid so you benefit from the full exemption where applicable.
Talk to an Energy ExpertFrequently Asked Questions
The Nuclear RAB levy is a government‑mandated charge added to business electricity bills to help fund nuclear projects during construction, starting with Sizewell C. It appears as a non‑commodity cost, similar to other policy‑related charges that already form part of business energy bills.
The Government has adopted the Regulated Asset Base (RAB) model to spread nuclear construction costs over a longer period. Instead of waiting until a plant generates electricity, funding begins during the build, helping to support long‑term low carbon and renewable energy goals, but increasing short‑term energy costs for UK businesses.
The Nuclear RAB levy introduces a new non‑commodity charge that was not previously included in business electricity bills, so most organisations will see higher overall costs once the levy appears. How the increase shows up will depend on your contract type either as a separate line on pass‑through contracts or built into the unit rate on fixed contracts.
The levy is set on a quarterly basis, so rates can rise or fall depending on construction progress and updated forecasts from the Low Carbon Contracts Company (LCCC).
If you are on a pass‑through contract, the Nuclear RAB levy will appear as a separate line item. On fixed contracts, it is usually absorbed into your unit rate, though this varies by supplier.
Yes. Companies with a valid Energy Intensive Industries (EII) exemption certificate will not be charged the levy at qualifying sites.
Yes. Even if you buy renewable electricity from green energy suppliers or hold Renewable Energy Guarantees of Origin (REGOs), the levy still applies because it is charged to all electricity users except EII‑exempt businesses.
Nuclear energy is considered a low carbon source that complements renewable generation such as wind, solar, and biomass. The Government sees nuclear as part of the wider sustainable energy mix needed to cut carbon emissions and reach Net Zero.
You can lower your overall exposure by reducing electricity usage, improving energy efficiency, or investing in on‑site renewable generation, such as solar panels. Using less power means paying less towards the levy.
By helping to finance nuclear construction upfront, the levy supports long‑term renewable energy expansion, reduces reliance on fossil fuels, and contributes to lowering the UK’s carbon footprint as part of the national climate change strategy.
No. The Nuclear RAB levy sits alongside existing policy costs such as the Contracts for Difference (CfD) scheme and other low carbon support mechanisms. It is an additional charge rather than a replacement.
The levy will continue throughout the construction period of Sizewell C and may apply to future nuclear projects if they are funded under the same RAB model.
Businesses should update budget forecasts, review contract structures, monitor quarterly rate changes, and consider energy‑efficiency improvements or renewable energy options to reduce overall consumption and costs.
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