California Gov. Gavin Newsom, D, is open to the possibility of delaying the closure of the state’s last operational nuclear power plant, Diablo Canyon, according to media reports, but some industry players remain skeptical about the feasibility of such an effort.
Last week, the Los Angeles Times reported that Newsom may try to delay the retirement of the plant, currently scheduled to occur in 2024 and 2025 when the federal licenses for its two units expire. Newsom told the newspaper’s editorial board that California could try to tap into the $6 billion in federal funding announced in February for nuclear reactors facing retirement, noting that the state “would be remiss not to put that on the table as an option.”
Some experts, however, are skeptical about whether the plant can – and should – be kept open, given the process that would be required to get its Nuclear Regulatory Commission (NRC) license extended, as well as recent efforts in the state to build gigawatts of clean energy generation to replace it.
There have always been groups in California pushing to keep the 2,240 MW Diablo Canyon plant open, because of the vast amount of greenhouse gas-free generation it provides, but “it’s somewhat surprising to change course at this point, given the work that the California Public Utilities Commission has done to replace that resource,” Seth Hilton, partner at Stoel Rives, said.
“And the fact that [Diablo Canyon] is supposed to retire in 2024 and 2025 – that’s not a long runway to change course,” he added.
Can Diablo Canyon’s life be extended?
Pacific Gas & Electric’s (PG&E) Diablo Canyon plant provides roughly 15% of California’s carbon-free electricity. In 2018, state regulators approved a settlement to shutter the plant completely in 2024 and 2025, but some experts have maintained that there are benefits to keeping the plant online. Last November, a report from experts at Stanford University and the Massachusetts Institute of Technology concluded that California could reduce its power sector emissions by over 10% from 2017 levels and save $2.6 billion in electric system costs by continuing to operate the plant through 2035.
PG&E in 2009 applied to the NRC to extend the Diablo Canyon plant’s license for another 20 years beyond the 2024 and 2025 expiration dates. However, the utility withdrew that application in 2018, following the decision to shutter the plant. The Stanford and MIT study stated that NRC staff typically conduct license extension reviews in less than 22 months, and the Diablo Canyon review could be shorter, given that some work was completed on it when PG&E first submitted its renewal application. Moreover, the report stated that if the plant’s current license expires while a new application is being reviewed at the NRC, the facility could continue operating until that process is completed.
“It’s very tight, but it’s possible,” Jacopo Buongiorno, Massachusetts Institute of Technology professor and lead author of the study, said, on whether Diablo Canyon’s license renewal process could be completed before the plant is scheduled to retire.
If PG&E were to opt out of pursuing such a process, an alternative is that another company could buy the plant and do so, he added.
In response to Newsom's comments, PG&E spokesperson Carina Corral said in an emailed statement that the utility is proud of the role that the Diablo Canyon power plant plays in California.
“We are always open to considering all options to ensure continued safe, reliable, and clean energy delivery to our customers,” Corral said.
Other experts, however, don’t think that pursuing a license renewal process for Diablo Canyon is feasible at this point.
“If they were going to extend the life of the plants, they’d have to reapply to the NRC and that would mean preparing the applications again. And I think enough has changed since they originally submitted, that that would be a pretty heavy lift,” Edwin Lyman, director of nuclear power safety with the Union of Concerned Scientists, said.
If the decision to keep the plant open were made tomorrow, it is highly unlikely that Diablo Canyon's Unit 1 would receive a renewal before its license expired, although that would still be possible for Unit 2, according to Lyman.
And on the issue of whether another party could take over ownership of Diablo Canyon and move forward with the renewal process, “they would have to transfer the existing license to a new entity – and that in itself is a regulatory action that could be subject to challenge,” he said.
Any application for license renewal requires detailed plans to account for the effects of aging on plant systems, and an environmental report that requires time to develop, NRC spokesperson Scott Burnell said in an email. The agency’s staff currently aims to complete the safety and environmental review of a docketed license renewal application in 18 months.
If a plant applies for renewal more than five years before its license is set to expire, it could get the benefit of continuing to operate even if something delays the final NRC decision past its expiration date, he added – but if the application is filed with less than five years remaining on the license, the plant would likely have to lay out a legal and technical justification for this treatment, he said.
While Newsom does not have authority over Diablo Canyon’s license, he “is in support of keeping all options on the table to ensure we have a reliable grid, especially as we head into a summer where CAISO expects California could have more demand than supply during the kind of extreme events that California has experienced over the past two summers. This includes considering an extension to Diablo Canyon, which continues to be an important resource as we transition to clean energy," Newsom spokesperson Erin Mellon said in an email.
However, “in the long term, the Governor continues to support the closure of Diablo Canyon as we transition to clean energy while ensuring the reliability of our energy grid,” Mellon added.
Another issue is that while Newsom talked about tapping into federal funding for nuclear plants with the Los Angeles Times, the Diablo Canyon facility may not be eligible for that funding, according to Ralph Cavanagh, energy program co-director with the Natural Resources Defense Council, who was involved with the negotiation of the original joint proposal to retire and replace the plant. The federal subsidies are only available to plants that are operating with short-term losses and aren’t recovering their operating costs, which PG&E is fully recovering, he noted.
Should Diablo Canyon’s life be extended?
There’s also the broader question of whether, even if it could, California should consider extending the life of Diablo Canyon to help bolster reliability as well as decarbonization efforts.
California’s energy agencies have concluded that the California Independent System Operator’s grid is short around 1,500 MW to 2,000 MW of needed generating capacity between now and 2026, CAISO spokesperson Anne Gonzales said in an email. The past two summers, she added, have demonstrated that the state needs additional resources to account for extreme conditions and supply delays that are not adequately captured in the traditional planning metrics.
Although California’s grid is in better shape than last year, it requires additional resources to ensure reliable energy during the summer months, when it could face extreme temperatures, drought, wildfires and low hydroelectric supplies, Gonzales said.
Last year, the CPUC issued a procurement order for 11.5 GW of clean energy resources – the largest ever capacity ordered by the agency in one shot – to help replace the Diablo Canyon plant as well as a suite of natural gas plants that are expected to retire soon. The agency and load-serving entities are well into procuring resources to replace that capacity, Hilton pointed out.
That order will help replace Diablo Canyon’s capacity, and its ability to meet grid reliability requirements, Mark Specht, Western states energy manager and senior analyst with the Union of Concerned Scientists, agreed – although regulators could be more carefully thinking through what it means to replace the plant without an increase in greenhouse gas emissions, he added.
“If all else remains the same, that’s an easy question to answer, whether you’re replacing it without an increase in greenhouse gas emissions,” Specht said. “But the grid is changing very rapidly so there are a lot of other factors at play here, and it’s not all that straightforward to determine whether we’re replacing Diablo Canyon without an increase in emissions.”
In addition, the retirement of the Diablo Canyon plant is tied into California’s offshore wind plans, Hilton noted – regulators are currently looking to preserve some of the transmission capacity off the Morro Bay area that will be freed up after the nuclear plant goes offline and use it for offshore wind.
Meanwhile, efforts to build out renewable and storage projects have faced their own share of challenges, including interconnection issues, soaring commodity prices for lithium, and tariff issues.
At the same time, Diablo Canyon isn’t scheduled to shut down for another few years, Specht said, “and so unless those supply chain issues really continue year after year, I’m hopeful those won’t be a huge barrier to getting resources online to replace Diablo."
Another source of hope for California’s longer-term reliability needs is the continued progress on Western grid integration and better coordination among all the power systems in the region, according to Cavanagh. This week, for instance, he noted, two major regional electric providers – the Bonneville Power Administration and Tucson Electric Power – joined the Western Energy Imbalance Market, a real-time wholesale energy trading market in the West.
