Methodology for specific elements in the proposed Economic Licence for Sizewell C
We have asked for views from specific named consultees on the methodology to determine 3 specific elements the Secretary of State will have to set as part of the final licence modifications.
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We’re seeking the views of statutory and other chosen consultees on the methodology to determine 3 specific elements the Secretary of State will have to set as part of the final licence modifications for the Sizewell C (SZC) project:
Initial Weighted Average Cost of Capital (IWACC)
The IWACC is an important component in the Economic Licence used to calculate the Return on Capital building block (or where applicable, the Additional Return on Capital and Liquidity building blocks) which form part of SZC’s Allowed Revenue prior to the commencement of plant operations.
Cost of Debt Adjustment (CDA)
Cost of Debt Adjustment in the Economic Licence incentivises SZC to manage its debt costs and raise any Private Debt efficiently while protecting SZC against movements in the market cost of debt.
Lower / Higher Regulatory Thresholds (LRT and HRT)
LRT and HRT determines the application of the Capex Incentive in the Economic Licence.
This consultation complements the consultation on the broader licence modifications we ran last year.
We have published this consultation on the grounds of transparency only; it is not open to responses other than from those bodies we have already contacted.
The consultation opened on 20 March 2024 and closes on 17 April 2024.