PG&E to shutter Diablo Canyon reactors by 2025
OREANDA-NEWS. June 22, 2016. PG&E, California's largest electric utility, will retire two reactors at the 2,240MW Diablo Canyon nuclear plant in 2024 and 2025 when the licenses expire, citing the state's evolving energy policy that will reduce future baseload power needs.
PG&E said it reached an agreement with labor and environmental groups not to pursue a license extension to operate the reactors for an additional 20 years as have most other US reactors. During the intervening years, PG&E agreed to replace Diablo Canyon power with carbon-free power, efficiency measures and energy storage. Diablo Canyon is the only nuclear plant currently operating in California.
Seven other US reactors plan to retire prematurely before their licenses expire as nuclear plants become uneconomic in competitive wholesale markets. Five US reactors have already shut, citing low gas prices or the need to avoid costly repairs.
Nuclear plants require a large workforce, costly security measures and are subject to strict regulatory oversight. That puts them at a disadvantage in a low natural gas-price environment when overall power demand is stagnant and wind and solar generation are booming.
Nuclear power was profitable when gas prices soared in the mid-2000s. As gas prices have fallen because of abundant production from shale regions, the situation reversed.
Diablo Canyon faces additional challenges in California, including the expansion of the state's renewable portfolio standard to 50pc by 2030, legislation to double energy efficiency goals, growth of distributed energy resources and the possible loss of its retail load under community aggregation plans.
In addition, environmental groups have challenged Diablo Canyon's continued operation under a state land lease that expires in 2018-2019. Looking ahead, Diablo Canyon faced increased scrutiny of its seismic risk in the wake of the Fukushima nuclear disaster and the discovery of a fault just offshore from the plant in San Luis Obispo County and the need to replace its cooling water system to comply with a state law that prohibits use of ocean water for power-plant cooling.
The proposed agreement involves a coalition with diverse points of view, PG&E chairman Tony Earley said.
"We continue to have some different perspectives - but the important thing is that we ultimately got to a shared point of view about the most appropriate and responsible path forward with respect to Diablo Canyon and how best to support the state's energy vision," Earley said.
PG&E committed to a 55pc renewable target by 2031.
Diablo Canyon 1, rated at 1,122MW will retire in November 2024 and unit 2, rated at 1,118MW, will retire in August 2025.
The proposal recognizes the value of carbon-free nuclear power "as an important bridge strategy to help ensure that power remains affordable and reliable and that we do not increase the use of fossil fuels while supporting California's vision for the future," Earley said.
Parties to the joint agreement include the International Brotherhood of Electrical Workers Local 1245, Coalition of California Utility Employees, Friends of the Earth, Natural Resources Defense Council, Environment California and Alliance for Nuclear Responsibility.