What does the Nuclear RAB levy mean for business energy bills?

A growing portion of every business energy bill is non-commodity costs. Unlike the price of the electricity itself (which is often fixed in contracts, like our SME plans), these cover all the other essentials: like network charges, government levies, and the costs of balancing supply and demand across the grid.

These charges are constantly on the move, influenced by everything from regulatory changes to shifting patterns in how and where electricity is generated and used. The combination of changing regulations, evolving infrastructure, and unpredictable market conditions makes costs tricky to forecast. All these factors can push non-commodity costs up or down with little warning.

Because these changes are often outside energy suppliers’ control, it’s challenging to shield customers from every cost increase. Sometimes, suppliers have little choice but to pass on non-commodity cost fluctuations to customers, even though at SSE Energy Solutions we do our best to cushion the impact wherever possible.

What’s the Nuclear Regulated Asset Base (RAB) levy?

The government is introducing a Nuclear RAB levy, to help fund the construction and operation of new nuclear power stations in the UK. The Low Carbon Contracts Company (LCCC) will collect the levy, with Sizewell C in Suffolk the first to benefit. LCCC issued initial information in August.

In simple terms, RAB is a type of financial model where energy consumers contribute towards the costs of building a nuclear plant through a regulated charge on their electricity bills, long before the facility generates any power.

This approach is designed to lower the financial risk for investors by providing a steady stream of income during the construction phase, which can last several years. Essentially, it spreads the cost of development over both investors and consumers, aiming to make large infrastructure projects more attractive and affordable to build.

Why is the government using RAB to fund nuclear energy?

Historically, the Contracts for Difference (CfD) scheme has been used to support low-carbon energy projects by guaranteeing a fixed price for the electricity generated. While effective for many renewables, CfDs can be less suitable for nuclear, given the huge upfront costs and prolonged construction periods involved.

The government opted for the RAB model because it helps address these challenges. By allowing project developers to recover costs earlier, the RAB model reduces both the risk and the cost of capital. This can, in theory, make financing nuclear projects more feasible and less expensive, potentially leading to lower overall costs for everyone in the long term.

Why do I have to pay for nuclear power if my energy is SSE Green?

Even if your business chooses to buy its electricity from renewable sources like wind or hydro, the Nuclear RAB levy applies to most business energy customers, regardless of where your electricity comes from.

Think of it as a way for electricity users to share the costs of big infrastructure projects that support the UK’s future energy security and low-carbon goals. The idea is that by spreading the cost across consumers, including those using renewables, the overall risk and expense of building new generation are reduced – ultimately helping to keep bills more stable in the long run.

So, while you may be supporting renewables directly, the levy is about ensuring the whole energy system is robust, diverse, and affordable for everyone. It’s not tied to your individual actions, but rather to the wider energy market and the government’s strategy for a cleaner and more reliable electricity network.

What other changes to non-commodity costs can we expect?

In the coming years, energy users can expect several changes in this area as the UK transitions to a cleaner, smarter energy system.

• Increasing network charges: As the UK upgrades its grid infrastructure and incorporates more renewables, network costs are likely to rise. Transmission Network Use of System (TNUoS) updates are expected in February 2026.
• New environmental levies: Funding for decarbonisation projects, such as the RAB levy for nuclear and support for renewables, may become more prominent on bills.
• Shifting policy costs: There may be adjustments to existing schemes like the Capacity Market or CfD, as the government tweaks support mechanisms to achieve net zero goals.
• Boosting competitiveness: We’re waiting for government consultation outcomes like the British Industry Supercharger Scheme, aimed at reducing electricity costs for Energy Intensive Industries.
• Greater transparency: Regulators are expected to work towards making these costs clearer to help consumers understand exactly where their money goes.

Overall, while energy prices will continue to be shaped by market forces, the composition of your bill is evolving, reflecting the UK’s commitment to cleaner energy and the need to fund major infrastructure upgrades. As always, staying informed about these changes can help energy users plan ahead and make sense of the shifting landscape of costs and charges in the UK's energy market.

We’ll continue to work with our customers to reduce rates where possible while also offering a range of products which can help cut bills in the short and longer term.