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UK’s Regulated Asset Base (RAB) “a very bad deal for consumers” – like the USA’s disastrous system in South Carolina

 Reaction to the Bill from stakeholders has been mixed. Some environmental bodies have questioned whether the RAB model set out in the Bill offers value for money for consumers and whether it transfers the risk of cost overruns to consumers. Tom Burke, the co-founder of E3G, a climate think-tank, told the Financial Times that the model risked being “a very bad deal for consumers” on the grounds that electricity generated from nuclear power would be more expensive than that from ‘homegrown’ renewables and would simultaneously “inhibit the market in wind, [an] area where we have the opportunity to create a global competitive industry in the UK”.145

The same article included comment from Steve Thomas, Professor of Energy Policy at the University of Greenwich, who questioned whether people would want their pension funds exposed to construction risk cost and whether that meant the consumer would take on all the risk. In an article in the i on the day the legislation was published, Doug Parr, Chief
Scientist at Greenpeace, noted that the RAB model had already been used to finance nuclear power in the United States, adding that the “results were disastrous”: “It transfers huge financial risk from the builders to bill payers. In South Carolina, 18 per cent of residents’ energy bills went to pay for a half-built reactor which has been abandoned and will
never produce electricity.”

 House of Commons Library 1st Nov 2021

November 15, 2021 - Posted by | business and costs, politics, UK

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