Nuclear Regulated Asset Base (RAB): industry code and licence modifications
Read the full outcome
Detail of outcome
The government has reviewed the consultation responses and considers it appropriate to proceed with the proposals set out in the consultation. The Secretary of State has proceeded with making modifications to the Balancing and Settlement Code (BSC) using her power to modify under section 29(1) of the Nuclear Energy (Financing) Act 2022.
The Secretary of State has made a legal instrument to implement the changes to the BSC. This has been sent to Elexon alongside a letter requesting that Elexon updates the BSC with the changes the Secretary of State has made using the power at section 29(1) of the Act. We have published the official versions of the legal instrument and letter. Modifications will take effect from 29 February 2024.
Following the introduction of the changes to the BSC outlined in this government response, future modifications to licences or industry codes could be made by way of the standard change processes or by the Secretary of State using the power at section 29(1) of the Act if the modifications fell within the scope of that provision.
Detail of feedback received
We received 8 responses to this consultation including from:
- Scottish and Welsh Ministers
- Ofgem
- National Grid ESO
- the BSC panel
- BSC parties
- electricity suppliers
Respondents largely agreed with the proposals set out in the consultation and/or did not raise concerns that would necessitate a different approach.
Original consultation
Consultation description
The Nuclear Energy (Financing) Act 2022 makes provision for the implementation of a Regulated Asset Base (RAB) funding model to finance new nuclear energy generation projects. The Nuclear Regulated Asset Base Model (Revenue Collection) Regulations 2023 made under the powers in Part 2 of the Act, set out the detailed mechanics of how the revenue stream would operate under the model.
Section 29(1) of the Act gives the Secretary of State powers to make modifications to Transmission and Distribution Licences, and the industry codes maintained in accordance with these licences so that the revenue stream can function as intended.
In this consultation we are seeking views on modifications proposed to the Balancing and Settlement Code (BSC):
- to establish EMR Settlement Limited (EMRS) as the Settlement Services Provider to carry out nuclear RAB settlement functions (for example, to calculate and settle supplier payments) on behalf of the revenue collection counterparty, the Low Carbon Contracts Company (LCCC)
- to ensure EMRS and the revenue collection counterparty receive the BSC data that they need to carry out their functions
Before making modifications using the powers in section 29(1) of the Act, the Secretary of State is required to consult with the persons named in section 29(4):
- Scottish Ministers
- Welsh Ministers
- holders of any licence being modified
- electricity suppliers
- Ofgem
The Act also makes provision for the Secretary of State to consult any other persons it considers appropriate, so we are also consulting:
- holders of transmission and distribution licences
- industry code administrators
- LCCC
- EMRS
- BSC parties and the BSC Panel
Although only the above bodies are being consulted, we have made this publicly available on the grounds of transparency.
See our consultation privacy notice.
Documents
Updates to this page
Last updated 22 February 2024 + show all updates
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Government response published.
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First published.