California may close Diablo Canyon, its last nuclear power plant. Is that really a good idea?

California’s nuclear era may soon be over. On Tuesday, Pacific Gas & Electric Co. unveiled a proposal to close Diablo Canyon, the state’s last remaining nuclear power plant, by 2025. If approved, this plan would shut the door on decades of controversy around the plant’s twin reactors, whose very existence once divided the Sierra Club.

It’s the latest chapter in the decimation of America's nuclear fleet. Back in 2013, the United States had 104 reactors supplying one-fifth of its electricity. Since then, five reactors have been retired early and at least seven more are slated for closure, victims of cheap natural gas, unfavorable economics, and local opposition.

These premature nuclear retirements can cause big headaches. Diablo Canyon supplies 9 percent of California’s electricity, all without emitting any carbon dioxide. Replacing that much clean power will be daunting. When the last two reactors at the San Onofre nuclear power plant in southern California closed in 2013, they were partly replaced by natural gas generation, worsening the impact on climate change.

PG&E is hoping to avoid a similar surge in emissions with this latest proposal. The utility plans to ramp up investment in efficiency, solar, wind, and storage between now and 2030 to replace Diablo Canyon with clean energy rather than fossil fuels. A key question, though, is whether it can actually pull off this tricky balancing act — and whether spending all this effort to displace existing zero-carbon energy is really the best way for California to slash emissions.

PG&E’s plan isn’t final yet; it still needs approval from California’s Public Utilities Commission. It has support from a variety of environmental groups, including the Natural Resources Defense Council and Friends of the Earth. Yet other greens, like the recently formed Friends of Diablo Canyon, have argued that it doesn’t make sense to shut down such a huge source of carbon-free power so long as climate change is a major priority. Let’s take a closer look.

Why Diablo Canyon is facing heavy pressure to shut down

The intake and outflow chutes for Diablo's cooling system have attracted lots of attention.

Diablo Canyon was first proposed in 1958 and attracted controversy from the very start. The Sierra Club initially supported this new source of pollution-free electricity — provoking some members to leave and start Friends of the Earth, an anti-nuclear green group. After the plant finally came online in 1985, perched on a sea cliff near San Luis Obispo, many environmentalists continued to lobby for a shutdown.

Opponents have raised several big concerns: First, they’ve argued that the plant is surrounded by earthquake faults and faces the risk of seismic disaster. Second, they’ve argued that Diablo Canyon’s intake of ocean water to cool the reactors is killing local marine life in the tidelands. Both are real issues, though they’re certainly contestable, and Will Boisvert does a nice job of sifting through them here.

In recent years, however, California’s politicians have been increasingly siding with the plant’s foes. Diablo Canyon sits on land owned by the state, and its leases are up in 2018. The State Lands Commission is mulling a new (and costly) environmental impact report for the plant as part of the renewal process. And the California State Water Resources Control Board is debating a plan to require Diablo Canyon to install cooling towers that would kill fewer fish — at a cost of $6 billion to $14 billion.

In principle, Diablo Canyon might have been able to weather these extra costs. The plant’s two reactors are licensed by the federal government to operate until 2024 and 2025, and PG&E could have applied for a 20-year extension. The bigger problem is that the energy landscape in California was shifting in such a way as to make the reactors unprofitable.

California’s changing energy landscape is crowding out nuclear

Over the past 10 years, three big trends have unfolded. First, thanks to the fracking boom, the United States has been flooded with cheap natural gas, which has put downward pressure on electricity prices everywhere. In California, this was compounded by a second factor: Electricity demand has stagnated.

That meant that Diablo Canyon, like other nuclear power plants around the country, is now receiving less and less money for the electricity it sells. The utility has fewer funds to pay for upgrades, cooling towers, and other fixed costs associated with operating large reactors.

On top of that, California has been massively ramping up policy support for wind and solar power, which benefit from both federal subsidies and state renewable policies. The state now gets about 10 percent of its electricity from utility-scale and rooftop solar panels. And due to the quirks of electricity markets, those sources are threatening to crowd out nuclear.

The chart below from PG&E tells the tale. Nuclear reactors operate 24/7 providing baseload electricity — they can’t ramp their output up or down very easily. But solar only ramps up during the day. This creates a traffic jam of excess electricity during the afternoon — an issue known as the "duck curve":

Right now California is curtailing (i.e., not using) some of that excess wind and solar during the day. But if the state wants to keep ramping up solar power, that’s untenable. As the chart on the right shows, solar curtailments would get increasingly frequent by the early 2020s.

So that leaves a few options: California could link up with nearby grids to share the load. Utilities could deploy more storage (pumped hydro, air storage, batteries) to shift around some of this excess solar power for morning and nighttime uses. They could try to juggle energy demand so that it lines up better with solar peaks. In theory, renewables, storage, and nuclear could work well together.

But there’s also an alternative strategy: PG&E could simply shut down its large, inflexible nuclear reactors in order to make more room for solar and wind, as well as more flexible natural gas plants that can ramp up and down more easily to follow that duck curve.

Given all the other challenges Diablo Canyon was facing — low electricity prices, the prospect of building expensive cooling towers, fierce environmental opposition — PG&E decided to take that last route. The utility is now proposing retiring the reactors when their federal licenses are up for renewal in 2024 and '25. In exchange, the state would agree to renew the plant's land leases in the medium term and drop the demand for costly new cooling towers.

"California’s energy landscape is changing dramatically, with energy efficiency, renewables and storage being central to the state’s energy policy," Tony Earley, PG&E’s chief executive, told the New York Times. "Diablo Canyon’s full output will no longer be required."

The big challenge: How will PG&E replace Diablo Canyon’s zero-carbon electricity?

(Photo by Marcus Yam/Los Angeles Times via Getty Images)

Utilities in other states have gone through similar calculations and shut down their reactors early. The problem is that when these nuclear plants have been closed, they often get replaced (in part) by natural gas or even coal generation — which increases CO2 emissions.

PG&E is hoping to avoid this fate. The utility has outlined a plan to replace the 17,000 gigawatt-hours of electricity per year from Diablo Canyon by 2031 — without resorting to fossil fuels:

1) Between 2018 and 2024, PG&E will invest in various energy efficiency improvements in homes and businesses — such as better insulation or newer air conditioning units — to cut demand by about 2,000 gigawatt-hours.

2) Between 2024 and 2030, PG&E will also procure enough wind, solar, and efficiency to replace another 2,000 gigawatt-hours of power.

3) By 2031, PG&E will aim to get 55 percent of its electricity from renewable sources.

Here’s a slide showing the strategy:

Here’s another slide showing how PG&E envisions its electricity mix to change between 2017 and 2030. The column on the left shows how it expects renewables to replace nuclear:

This may all work out nicely. But there are also some questions worth asking here. What happens if PG&E can’t replace all the electricity that Diablo Canyon produced with renewables and efficiency alone? Will it turn to natural gas turbines instead, increasing CO2 emissions?

Or: What happens if natural gas prices unexpectedly spike, as they have in the past? Or demand rises faster than expected? Will California regret having closed its reactors because of short-term market considerations? Energy markets, after all, can be tough to predict. But any decisions around large nuclear power plants have to be made many years in advance — and they’re tough to reverse. Once PG&E begins laying off workers and decommissioning the plant, it can’t backtrack if the grid runs into unexpected difficulties.

One final question: how might PG&E's current proposal compare with alternative plans in which Diablo Canyon stayed open and renewables and storage ramped up to displace fossil generation elsewhere?

California's regulators still have to approve a nuclear shutdown

Diablo Canyon’s fate isn’t set in stone just yet. The California Public Utilities Commission still has to review and approve PG&E’s plan. So there's still opportunity for more battling and maneuvering around the plant.

On the one side, a number of green groups and labor unions have signed on to PG&E’s plan, including Friends of the Earth, NRDC, the International Brotherhood of Electrical Workers, the Coalition of California Utility Employees, Environment California.

On the other side, a smaller group of greens and climate scientists, including NASA’s James Hansen, have been lobbying strongly to keep the plant open. (Again, the reactors are licensed by the Nuclear Regulatory Commission until 2024 and '25, and they could apply for 20-year extensions, though they might need further upgrades.)

Back in January, David R. Baker wrote a good overview of this debate in the San Francisco Chronicle. Note that this fight occasionally gets framed as nuclear versus renewables. But it doesn't have to be so: in theory, the two sources could complement each other.

If Diablo Canyon does close, America will have lost 14 reactors since 2013

Photo by David McNew/Getty Images

Here’s a complete list of nuclear reactors that have already closed since 2013 — as well those scheduled to retire early:

2013: Crystal River 3 in Florida, San Onofre 2 and 3 in California, Kewaunee in Wisconsin

2014: Vermont Yankee in Vermont

2016: Fort Calhoun in Nebraska

2017: Fitzpatrick in New York, Clinton in Illinois

2018: Quad Cities 1 & 2 in Illinois

2019: Pilgrim in Massachusetts, Oyster Creek in New Jersey

2024: Diablo Canyon 1 in California (??)

2025: Diablo Canyon 2 in California (??)

That’s a lot of zero-carbon electricity coming offline. Writing in the Los Angeles Times, Robert Bryce offers this comparison: The six nuclear reactors scheduled to retire between 2016 and 2019 produce roughly as much electricity as all of America’s solar panels combined did last year.

There are also a number of additional reactors that could face early retirement in the years ahead, due to competition from cheap natural gas, needed upgrades, local opposition, or some combination of those factors. That list includes: Indian Point and Nine Mile in New York; Three Mile Island in Pennsylvania; Davis-Besse in Ohio; Ginna in New York; and Millstone in Connecticut.

At this point, avoiding further closures would likely require proactive policy changes that gave additional support for existing nuclear facilities to keep running. Groups like Environmental Progress fought for a policy like this in Illinois to save the Quad Cities and Clinton reactors, but the legislature never took it up.

One obstacle here: it's awfully hard to persuade people that the government should step in and subsidize unprofitable reactors being roiled by market forces. You'd basically have to make the case that this is a coherent part of a larger strategy — along with support for renewables and efficiency — to stave off climate change.

As for new nuclear reactors that could replace the old ones, there are only five on the horizon. The Tennessee Valley Authority just brought the Watts Bar 2 reactor online in May, America's first new reactor in decades. Another two reactors are under construction in Georgia, as well as two more in South Carolina. But that's it.

The biggest problem facing new nuclear construction is that the plants are so expensive to build, and most utilities are far more interested in renewables and natural gas than in atomic energy. I’ve written before about how nuclear power got so expensive in the United States (along with some ideas for bringing that down). Perhaps smaller modular reactors of the future will turn out to revive nuclear’s fortunes, if they ever pan out. But for now, the outlook for what is still America’s biggest source of clean electricity looks bleak.

Further reading

-- A look at why America stopped building nuclear power plants (and what we can learn from South Korea)

-- Note that Sweden was also faced with the looming shutdown of its nuclear fleet — but the government recently stepped into avert closures by cutting a key nuclear tax.

-- Julian Spector had a nice piece in the Atlantic about the policy debate in Illinois over whether to save the state's endangered (and currently money-losing) reactors.