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WASHINGTON (Reuters) – The Biden administration said on Monday it has approved conditional funding of up to $1.1 billion to prevent the closure of the Diablo Canyon nuclear power plant in California, as part of its effort to fight climate change.
The Pacific Gas & Electric plant, which was set to fully shut in 2025, applied for funding in the Department of Energy’s (DOE) initial phase of the $6 billion Civil Nuclear Credit program meant to help keep struggling nuclear power reactors open. Diablo is the last nuclear plant in California.
The Biden administration believes nuclear power is a key component of curbing climate change and wants to keep plants open ahead of the development of next-generation reactors. President Joe Biden wants to decarbonize the power grid by 2035.
The U.S. nuclear power industry’s 92 reactors generate more than half of the country’s virtually carbon-free electricity. But about a dozen reactors have closed since 2013 in the face of competition from renewable energy and plants that burn plentiful natural gas.
U.S. Secretary of Energy Jennifer Granholm said the grant was 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.”
PG&E (NYSE:PCG) did not immediately respond to a request for comment.
Patti Poppe, the chief executive officer of PG&E, told Reuters earlier this month that the company is applying to the Nuclear Regulatory Commission for a license to allow Diablo to continue operating. Poppe said the plant is also ordering more uranium fuel for the reactor, and dry casks for storing nuclear waste.
“There have been constraints on access to uranium,” following Russia’s Fed. 24 invasion of Ukraine, Poppe said.
Critics of keeping open the Diablo Canyon plant, located in San Luis Obispo County, say the region is vulnerable to earthquakes and that there is no permanent place for disposing of radioactive nuclear waste, currently held at nuclear plants across the country.
Granholm said “we can protect these facilities and the communities they serve.”
Some politicians who have been wary of problems associated with nuclear waste have come out in support of the Civil Nuclear Credit program. U.S. Senator Dianne Feinstein, a Democrat from California, said extending the life of Diablo was necessary for the state to meet its clean energy goals and to deliver reliable power. Feinstein said she would monitor the funding process to ensure safety and environmental reviews are undertaken.
Not every plant that applied is getting funding in the initial phase of the program. Holtec International, which in May bought the Palisades nuclear plant in Michigan, said on Friday that DOE rejected its application for funding.
Final terms of the grant to PG&E are subject to negotiation and finalization, DOE said.
