Have your say on the Nuclear Energy (Financing) Bill

Aims of the Bill

The Nuclear Energy (Financing) Bill aims to provide for a new model for financing new nuclear power stations in the UK.

The Bill creates a framework for a Regulated Asset Base (RAB) model to be used. The RAB model is expected to allow new nuclear projects to be financed via private investors such as pension funds and insurers and reduce reliance on overseas investors. It would be funded by a charge on electricity suppliers, who are expected to pass the cost on to consumers.

The Bill allows for eligible nuclear generation companies to be given a right to a regulated revenue stream during the construction, commissioning, and operation of a new nuclear project.

The Bill does this by:

• Allowing for the Secretary of State to ‘designate’ an eligible nuclear company to receive the benefit of the RAB special licence conditions. Once they are ‘designated’ the Secretary of State will be able to amend the company’s existing generation licence to insert the special conditions of a RAB that sets out how the project will be regulated.
• Allowing the Secretary of State to regulate for revenue collection contracts, which will be used to provide the funding to a nuclear company. Payments will be managed by a ‘revenue collection counterparty’. Projects will be paid an ‘Allowed Revenue’ which is broadly the agreed capital cost of a project along with other relevant costs. This would be paid over a period agreed with the Government. Payments will be made by electricity supply companies who are expected to pass the cost on to consumers. Costs will start to be charged to consumers during construction based on the Allowed Revenue due for the period. During operation the cost will be the Allowed Revenue due minus the value of selling the energy generated.
• Creating a Special Administration Regime, modelled on that already in place in other parts of the energy industry. If a generator with a RAB contract becomes insolvent (which the Government considers very unlikely), the Government can apply for a court order to appoint a special administrator to manage that generator and the plant. They would have the objectives of maintaining (or restarting) energy generation and rescuing the generator.
• Amending the Energy Act 2008 in relation to Funded Decommissioning Programmes. This would ensure clarity on how decommissioning programmes would apply to certain finance sources in nuclear projects.

The Bill does not cover the actual investment decision for a specific project, the level of expenditure and payments, provisions to manage risk and overall value for money. The Final Investment Decision (FID) would be made after designation and any final licence amendments; following this the revenue collection contract would be made.

Territorial extent

Energy is generally a reserved matter. Most of the Bill (parts 1, 2 and 3) extend and apply to England, Wales and Scotland.

Northern Ireland does not share the energy infrastructure of Great Britain and is therefore not included in provisions related to new nuclear power funding.

The provisions relating to funding decommissioning programmes apply and extend to England, Wales and Northern Ireland.

Background papers

Alongside the Bill, the Government published a series of documents related to it:

• Nuclear Energy (Financing) Bill Explanatory Notes
• Delegated Powers Memorandum
• Impact Assessment

Follow the progress of the Nuclear Energy (Financing) Bill

The Nuclear Energy (Financing) Bill 2021–22 was introduced to the House of Commons on 26 October 2021. This Bill was debated at second reading on Wednesday 3 November 2021 and has now been sent to a Public Bill Committee which will scrutinise the Bill line by line and is expected to report to the House by Tuesday 30 November 2021.

• Bills before Parliament: Nuclear Energy (Financing) Bill 2021–22
• Read Explanatory Notes: Nuclear Energy (Financing) Bill 2021–22
• House of Commons Library Briefing Paper

Oral evidence sessions are expected to be held on Tuesday 16 November.

Guidance on submitting written evidence

Deadline for written evidence submissions

The first sitting of the Public Bill Committee is expected to be on Tuesday 16 November. Written evidence can now be sent in to the Public Bill Committee. The sooner you send in your submission, the more time the Committee will have to take it into consideration and possibly reflect it in an amendment. The order in which amendments are taken in Committee will be available in due course under Selection of Amendments on the Bill documents pages. Once the Committee has dealt with an amendment it will not revisit it.

The first sitting of the Public Bill Committee is expected to be Tuesday 9 November and the Committee is scheduled to report by Tuesday 30 November. However, please note that when the Committee concludes its consideration of the Bill it is no longer able to receive written evidence and it can conclude earlier than the expected deadline of 5.00pm on Tuesday 30 November. You are strongly advised to submit your written evidence as soon as possible.

Your submission should be emailed to scrutiny@parliament.uk

Further guidance on submitting written evidence can be found here.

Image: Parliamentary Copyright