DOE to award $1.1B to Diablo Canyon nuclear plant through civil nuclear credit program

The U.S. Department of Energy (DOE) selected the Diablo Canyon Power Plant, located near Avila Beach, Calif., to receive funding from the Civil Nuclear Credit (CNC) Program.

The $6 billion CNC program, funded by the Bipartisan Infrastructure Law, supports the continued operations of safe and reliable nuclear energy facilities. America’s current fleet of nuclear reactors – the nation’s largest source of carbon-free power – is an important part of President Joe Biden’s goal of 100 percent clean electricity by 2035 and a net-zero emissions economy by 2050.

“This is a critical step toward ensuring that our domestic nuclear fleet will continue providing reliable and affordable power to Americans as the nation’s largest source of clean electricity,” U.S. Secretary of Energy Jennifer Granholm said. “Nuclear energy will help us meet President Biden’s climate goals, and with these historic investments in clean energy, we can protect these facilities and the communities they serve.”

Nuclear power currently provides roughly 50 percent of the nation’s carbon-free electricity, but 13 commercial reactors have seen early closures across the United States since 2013 due to a variety of factors. These closures have led to increased carbon emissions in the regions in which they operate.

Units 1 and 2 at the Diablo Canyon Power Plant — owned and operated by Pacific Gas and Electric Company (PG&E) — were slated to be decommissioned in 2024 and 2025. However, this conditional award of CNC credits, valued at up to $1.1 billion, creates a path forward for Diablo Canyon to remain open. The final terms of the deal are currently being negotiated and finalized by the DOE. Final award amounts will be determined following the completion of each year of the award period, with amounts awarded based on actual costs.

“I am happy that the Bipartisan Infrastructure Law, which I helped craft and get signed into law last year, is now providing California this support to maintain grid reliability while pursuing our goal of a net-zero power supply. While there are still remaining safety concerns that need to be addressed, including relicensing by the Nuclear Regulatory Commission, these funds–when combined with the funds made available by the California Legislature–will help ensure Diablo Canyon can safely continue operations,” U.S. Rep. Salud Carbajal (D-CA) said.

Diablo Canyon produces approximately 16 GWh of electricity annually, which is roughly 15 [percent of the state’s clean energy. When finalized, this award will save 1,500 clean energy jobs.

“This is another very positive step forward to extend the operating life of Diablo Canyon Power Plant to ensure electrical reliability for all Californians,” PG&E Corp. CEO Patti Poppe said. “While there are key federal and state approvals remaining before us in this multi-year process, we remain focused on continuing to provide reliable, low-cost, carbon-free energy to the people of California while safely operating one of the top performing plants in the country.”

This is the first CNC award cycle. It prioritized reactors facing the most imminent threat of closure, so applications came from reactors that had already announced intentions to cease operations due to economic factors. The second CNC award cycle will prioritize reactors that are projected to shut down due to economic factors within the next four years. DOE is expected to begin accepting applications for the second cycle of CNC funding in January 2023.