ARKANSAS, January 22 (Future Headlines)- The US Administration has taken a crucial step in preserving its nuclear energy capabilities by finalizing a credit award and payment agreement of USD 1.1 billion under the Civil Nuclear Credit (CNC) program. This strategic investment, amounting to USD 6 billion under the Bipartisan Infrastructure Law, is designed to support the existing reactor fleet and ensure the operation of the Diablo Canyon nuclear power plant. The Pacific Gas and Electric Company (PG&E) plant had been conditionally awarded the credit in November 2022.
Maria Robinson, the Director of the US Department of Energy’s Grid Deployment Office, emphasized the importance of maintaining the nation’s nuclear fleet to achieve clean energy goals and ensure a reliable energy supply for homes and businesses. The Administration’s commitment to domestic nuclear energy is evident in this move, showcasing support for existing generation while aiming to strengthen the nuclear power industry.
The credit payments, spanning four years of operation from 2023, will be disbursed in installments. Adjustments to the amounts will be made based on factors such as the actual costs associated with keeping the two-unit Diablo Canyon plant operational. The initial payment, scheduled for 2025, will be calculated based on the plant’s operation in 2023 and 2024.
Nuclear power currently contributes nearly 50% of the USA’s carbon-free electricity. However, economic factors and shifts in energy markets have led to the premature closure of 13 commercial reactors since 2012. The CNC program, an integral part of the Bipartisan Infrastructure Law signed in November 2021, addresses these challenges. It allocates credits to “certified” reactors projected to close for economic reasons, with the closure expected to result in increased air pollutants and carbon emissions.
The Diablo Canyon plant, operated by PG&E, had initially planned to close both units by the end of their current licenses – Unit 1 in 2024 and Unit 2 in 2025. This decision was aligned with California’s energy policy, emphasizing efficiency, renewables, and storage. However, a significant development occurred in September 2022. As California faced a record-breaking heatwave and witnessed its highest-ever peak demand on the energy grid, the state enacted a law permitting the continued operation of the two nuclear units. These units contribute 9% of California’s power generation.
The finalized credit award and payment agreement under the CNC program are instrumental in supporting Diablo Canyon’s operation, providing financial backing to address economic challenges and maintain a crucial source of carbon-free electricity. The move reflects the Administration’s commitment to a diverse energy portfolio, recognizing the significance of nuclear power in achieving clean energy goals and ensuring the resilience of the nation’s energy infrastructure.
Editing by Sarah White