Dive Brief:
- NextEra Energy will close its 601 MW Duane Arnold nuclear plant in Iowa in late 2020 after reaching an agreement with utility Alliant to end its power purchase agreement (PPA) with the plant five years early.
- Alliant will pay $110 million and buy 340 MW of wind energy from existing NextEra projects in exchange for ending the PPA, the companies said in a release. Alliant expects its customers to save $300 million from the move, including the costs of replacing energy and capacity.
- NextEra will spend $650 million on existing and new renewables in Iowa by 2020, the company said, including repowering four old projects to supply Alliant. The closure deal is subject to approval by Iowa state regulators.
Dive Insight:
Nuclear plants in the U.S. are under pressure from cheap natural gas and renewables, forcing many to close before the end of their operational lives. Roughly a quarter of the 99 nuclear reactors in the country are at risk of early retirement, Bloomberg New Energy Finance reported in March.
The Duane Arnold Energy Center, opened in 1975, is the latest casualty of the trend. Iowa gets roughly 40% of its electricity from low-priced wind, and the intermittent generation can put extra strain on nuclear finances, since the plants cannot easily ramp up and down to adjust to changes in wind output.
Alliant says that ending its nuclear PPA five years early and pivoting to wind will save its customers $300 million from 2021 to 2025, though the plant is licensed by the Nuclear Regulatory Commission to operate until 2034.
NextEra will evaluate the site for redevelopment as a natural gas, solar or battery energy storage facility.
