The New RAB Levy: What It Means for UK Energy Bills

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The UK government has introduced a new Regulated Asset Base (RAB) Levy, a charge on electricity suppliers designed to help fund new nuclear power projects.

What Is It?

The RAB Levy is part of the Nuclear Energy (Financing) Act 2022. It lets approved nuclear companies - such as those building Sizewell C - receive steady revenue during construction and operation, funded by electricity suppliers. In practice, suppliers are expected to pass this cost on to consumers via energy bills.

Why Introduce It?

Nuclear power projects are expensive to build upfront but vital for long-term, low-carbon energy. The RAB model spreads costs across all users and attracts private investment, reducing the need for direct government funding.

When and How Will It Be Charged?

The start of the levy collection will begin in December2025 (originally expected in November 2025).
It’s a consumption-based charge - the more electricity you use, the more you’ll pay.
It will appear as part of your non-commodity or third-party charges on bills.
Suppliers pay the levy to a government-appointed counterparty, who passes funds to nuclear developers.

How Much Will It Cost?

User Type	Typical Annual Usage	Estimated RAB Levy Cost (from 2025)	Notes
Household	3,500 kWh	≈ £12 per year	Included in supplier’s unit rate; may vary slightly by region.
Small Business (e.g. shop, café)	10,000 kWh (10 MWh)	≈ £35 per year	Visible on pass-through contracts from Dec 2025.
Medium Business (office, small factory)	100,000 kWh (100 MWh)	≈ £354 per year	Higher-use sites will see proportionally larger costs.
Large Industrial User	1 GWh (1,000 MWh)	≈ £3,540 per year	May qualify for partial exemption under EII scheme.

💡 The current rate is set at about £3.540 per MWh (≈ 0.354 p/kWh). This is an interim levy, set to remain in place until March 2027, at which point it will need to be increased.

What This Means for You

Fully Fixed-rate contracts: your supplier may absorb the levy until renewal or reserve the right to adjust for new government charges.
Pass-through or Semi-Fixed contracts: the levy will show as a separate line item or as part of the unit rate from November 2025.
Exemptions: Certain energy-intensive industries (EIIs) may be exempt.
Most households and small businesses will pay it automatically.

The Bottom Line

The RAB Levy is a new way of funding nuclear energy - making every electricity user a small contributor to the UK’s future power supply. For most people, the cost will be modest, but it highlights how energy infrastructure funding is increasingly shared across the system.