Energiewende U.S.: PG&E to phase out California’s last nuclear plant in favor of renewables

The California utility has also set a goal of 55% renewable energy by 2031, which is more aggressive than the state’s current renewable energy mandate.

June 21, 2016 Christian Roselund

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When changes are coming, you can either attempt to delay them or get ahead of them and try to steer the course of these changes. Today Pacific Gas & Electric Company (PG&E) showed that in terms of the shift to renewable energy, it is choosing a combination of both options.

The utility has announced a proposal to California regulators to phase-out the Diablo Canyon Power Plant (DCPP), by 2026. Diablo Canyon is the state’s sole remaining operational nuclear power plant, following the closure of the San Onofre Nuclear Generating Station in 2013. It is also one of two remaining operational plants on the U.S. West Coast.

Under the proposal, PG&E will additionally increase energy efficiency efforts and set a goal to procure 55% of electricity from renewable energy sources by 2031. This is more aggressive than California’s renewable energy mandate of 50% by 2030, and as such an unusual proposal by an investor-owned utility.

However, PG&E is not alone. The measures represent a joint proposal by the utility, the utility workers’ union, the electrical workers’ union, three environmental groups and a nuclear watchdog.

However, solar trade groups are not part of that coalition, and have critiques of the plan. California Solar Energy Industries Association (CalSEIA) Executive Director Bernadette Del Chiaro says that while the plan to replace nuclear generation with carbon-free sources is “laudable”, that the plan contains no provisions to replace any of the nuclear capacity with solar.

“Given the significant growth of the rooftop solar market in PG&E territory, it seems like a major oversight of this agreement to preclude customer-sited renewable energy from counting toward the replacement power and to not allow tariffs to at least help achieve these goals,” Del Chiaro told pv magazine.

“Further, to dictate how 2,000 annual gigawatt hours are to be brought online, eight years in advance, and seems premature.”

Aside from overlooking rooftop solar, this move to shut down the last nuclear power plant as part of an increase in renewable energy is reminiscent of Germany’s “Energiewende”, of which one component is the nation’s nuclear phase-out.

In supporting documents, PG&E references technical challenges which are similar to those experienced in Germany. The utility cites “challenges with inflexible baseload generation” in the proposal, and also “the challenge of managing overgeneration and intermittency conditions under a resource portfolio increasingly influenced by solar and wind production”.

Nuclear is the least flexible form of conventional generation, and this conflict has resulted in negative power prices in California as well as curtailment of wind and solar. This issue has been highlighted in the U.S. press, including National Public Radio and MIT Technology Review, however the many articles often fail to recognize that it is the inflexibility of nuclear and other forms of baseload generation which are causing negative prices, as wind and solar typically curtail instead of over-generating.

And by setting a date of 2024/2025 for full phase-out, PG&E is planning to continue operation of the Diablo Canyon plant for another nine years, a period during which such issues will only get worse.

PG&E is also protecting itself from financial impacts due to these changes. Under this proposal, the utility will ensure that it fully recovers its investments in Diablo Canyon.

Additionally, the utility plans to make sure that any new renewable energy procurement is covered in “non-bypassable” charges to its customers. These are charges that owners of net-metered PV systems must also pay, in addition to non-solar customers.

However, CalSEIA’s Del Chiaro notes that it is not yet clear if these additional non-bypassable charges will significantly impact the economics of net metered solar arrays in California.

Update: This article was modified at 5:00 PM Eastern Time (U.S.) on July 21 to include CalSEIA’s perspective.

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