PG&E to replace nuclear plant with renewables

OREANDA-NEWS. June 22, 2016. California utility Pacific Gas & Electric (PG&E) says it expects to exceed the state's aggressive renewable energy mandate despite its plan to close the Diablo Canyon nuclear power plant.

The utility today said it would invest in energy efficiency, renewable energy and energy storage and retire the 2.2GW nuclear facility, which serves about 3mn customers, by 2025.

In addition it pledged to get 55pc of its electricity from renewables starting in 2031, surpassing the state's 50pc by 2030 mandate. The company will take the steps as part of an agreement with environmental and labor groups to shut down what is California's last nuclear power plant.

Other states, including Illinois and New York, are wrestling with whether to adopt policies to support nuclear power plants, which are having a hard time competing with natural gas but can help meet climate goals. Nuclear plants do not emit greenhouse gases when operating.

PG&E said growth in renewable energy, energy efficiency and energy storage, driven by state policies, negates the need to keep the nuclear plant running after its two units' operating licenses expire in 2024 and 2025.

"California's energy landscape is changing dramatically," PG&E chief executive officer Tony Earley said. "As we make this transition, Diablo Canyon's full output will no longer be required."

Environmentalists said the agreement should serve as a model for other utilities and states grappling with whether to keep long-running nuclear plants in operation. "Nuclear power versus fossil fuels is a false choice based on yesterday's options," Natural Resources Defense Council president Rhea Suh said. "The Diablo Canyon solution is the way of the future."

Diablo Canyon began operation in 1985 and generates about 18,000GWh/yr. It accounts for about 20pc of PG&E's generation and about 9pc of California's total

PG&E said it would procure new resources in three phases, starting with a solicitation for 2,000GWh of energy efficiency projects in 2018-2024, followed by 2,000GWh of renewables and efficiency in 2025-2030. The final step would be to add any additional resources needed to meet the 55pc target, with delivery scheduled for 2031 to 2045.

The company said it does not expect consumer rates will rise as a result of the agreement, given it will not have to pay to re-license and operate Diablo Canyon, and it expects lower electricity demand and lower costs for renewable energy resources.

The agreement will need to be approved by the state Public Utilities Commission. PG&E said it will also work with other agencies to more fully develop its plans for obtaining more renewable energy generation.

PG&E reached the agreement with the NRDC, International Brotherhood of Electrical Workers Local 1245, Friends of the Earth and Environment California.