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The US Administration, through the Department of Energy (DOE) has announced the signing of the credit award and payment agreement with Pacific Gas & Electric Company (PG&E) to finalise terms for $1.1bn in credit payments through the Civil Nuclear Credit (CNC) programme for the Diablo Canyon NPP in California. The $6bn CNC programme is funded by the Bipartisan Infrastructure Law and administered by DOE’s Grid Deployment Office. It supports the continued operations of nuclear energy facilities, preserving thousands of jobs while avoiding an increase in carbon emissions.

“Preserving the nation’s nuclear fleet is critical not only to reaching America’s clean energy goals, but also to ensuring that homes and businesses across the country have reliable energy,” said Maria Robinson, Director of DOE’s, Grid Deployment Office.

In November 2022, DOE announced the conditional selection of Diablo Canyon NPP for CNC credits, which has now been finalised. The total award of CNC credits is capped at $1.1bn. The credits are slated to be paid in instalments over four years from 2023 to 2026. The amount of the annual payment will be adjusted based on a number of factors, including actual costs incurred to extend the operation of the NPP. The first payment of is slated for 2025 based on the operation of the plant in 2023 and 2024.

Diablo Canyon units 1&2 provide 9% of the total California power generation. They were scheduled to cease commercial operation in 2024 and 2025, but the credit award will support their continued operation. The two 1,100 MWe pressurised water reactors began operation in 1985 and 1986 and produce 9% of the state's electricity. PG&E in 2016 proposed closing Diablo Canyon when the two units reached the end of their current operating licences in 2024 and 2025. This was approved by the California Public Utilities Commission (CPUC) in 2018. All other nuclear plants in California had already closed. Units 2&3 at Southern California Edison's San Onofre nuclear generating station (SONGS) were prematurely retired in 2013.

However, in September 2022, California lawmakers voted to extend the operating life of Diablo Canyon by five years, in part by giving PG&E a $1.4bn forgivable loan to be repaid with federal funding. CPUC in December 2023 agreed to allow the NPP to operate for an additional five years to 2030, despite calls from environmental groups for its closure. The US Nuclear Regulatory Commission (NRC) still needs to conduct a safety review.

While nuclear power currently provides nearly 50% of US carbon-free electricity, shifting energy markets and other economic factors have resulted in the early closures?of 13 commercial reactors since 2012. These closures have led to an increase in carbon emissions in those regions, poorer air quality for residents living in the surrounding areas, and the loss of thousands of high-paying jobs.

Image: Diablo Canyon nuclear power plant in California, USA

Date: Wednesday, 24 January 2024
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