PG&E to replace nuclear with renewables, efficiency, storage

Californian utility Pacific Gas and Electric Company (PG&E) on Tuesday announced plans to replace its nuclear generation with energy efficiency, renewables and energy storage by 2025.

The company, a subsidiary of PG&E Corp (NYSE:PCG), intends to operate the two nuclear reactors at the Diablo Canyon power plant to the end of their operating licenses -- November, 2024 and August, 2025. It will not seek to relicense the facility beyond that, if the current proposal is approved.

The decision reflects California's new energy policies, including a Renewable Portfolio Standard of 50% by 2030, which will make Diablo Canyon redundant. "California’s energy landscape is changing dramatically with energy efficiency, renewables and storage being central to the state’s energy policy. As we make this transition, Diablo Canyon’s full output will no longer be required," said PG&E Corp chairman, CEO and president Tony Earley.

The proposal has been prepared together with labor and environmental organisations and is contingent on a number of regulatory actions. As part of it, PG&E has committed to a 55% renewable energy target in 2031.

The utility says that the proposal will probably have a lower overall cost than relicensing the nuclear power plant and operating it through 2044. Besides lower demand, the reasons for this are declining renewables costs and potentially higher renewable integration costs if the plant is relicensed.

In 2015, non-hydro renewables accounted for 18% of California's power, an increase of two percentage points from 2014.

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