US NextEra Energy Resources, the wholesale power generating subsidiary of Florida-based NextEra Energy, announced on 29 July that it had agreed to shorten its power purchase agreement (PPA) with Alliant Energy and would retire the Duane Arnold Energy Centre (DAEC), a 615MWe boiling water reactor in Iowa, by the end of 2020.
Duane Arnold is licensed to operate until February 2034, but was expected to close in 2025 when the PPA with Alliant was set to expire. If the agreement is approved by the Iowa Utilities Board, Alliant will pay NextEra $110m in September 2020 as part of the buyout. NextEra will supply Alliant’s customers with wind energy from four of its repowered Iowa wind facilities (some 340MWe of combined capacity) under other PPAs.
The transactions are expected to save customers almost $300 million in energy costs, on a net present value basis, over 21 years, according to NextEra.
The company said the regional transmission organisation, Midcontinent Independent System Operator, and the Nuclear Regulatory Commission will be notified of plans to close and decommission the plant "at the appropriate time".
Duane Arnold minority owner (20%) Central Iowa Power Cooperative (CIPCO) expressed concern about near-term, adverse effects of the plant's early closure on consumer-members for many of Iowa's electric cooperatives and municipalities. Duane Arnold currently provides 35% of the cooperative's energy portfolio which also includes coal at 37% and wind, hydro, landfill gas and solar contributing a combined 27%.
Duane Arnold, the only nuclear plant in Iowa, began commercial operation in 1975. However, it has faced similar financial struggles to other small single-unit nuclear plants in the USA, which have closed, or announced closure, since May 2013 when the Kewaunee plant in Wisconsin was the first to be shuttered. Vermont Yankee, Fort Calhoun, Pilgrim, Palisades, and Oyster Creek followed. Thirteen more, including Duane Arnold, are slated to retire over the next seven years. These closures will remove more than 16GWe of generation from the grid, or around 15% of existing nuclear capacity.
NextEra plans to invest about $650m in existing and new renewables generation across the state by the end of 2020, including approximately $250m to repower the four wind facilities that are part of the deal with Alliant. NextEra is also evaluating redevelopment opportunities at the Duane Arnold site, including the construction of new solar energy, battery storage, or natural gas facilities.