NextEra Energy Resources last week announced that it will close the 615-MW Duane Arnold Energy Center, Iowa’s only nuclear power plant, five years earlier than expected as a result of a buyout agreement with Alliant Energy.
Florida-based NextEra said that Alliant, the plant’s largest customer, will pay $110 million to NextEra in September 2020 to cover the last five years of their power purchase agreement. Alliant will instead buy 340 MW of power from four wind farms that NextEra plans spend $250 million to repower, part of a $650 million package of investments in Iowa renewables.
The deal is contingent upon Alliant getting approval from the Iowa Utilities Board to recover the buyout payment from ratepayers. Alliant said the deal will save its customers nearly $300 million over 21 years beginning in 2021.
“Partially replacing energy from Duane Arnold with NextEra’s additional wind investments in Iowa will bring significant economic benefits to our customers,” Alliant CEO Patricia Kempling said in a statement.
NextEra said it expects to gradually reduce staff at the plant, which employs 500 now, over the next seven years as it decommissions it. It also said it is evaluating redevelopment opportunities for the plant site, including new solar energy, battery storage or natural gas facilities.
Duane Arnold is one of numerous nuclear power plants experiencing economic difficulties because of cheap natural gas and falling renewable generation costs. Bloomberg New Energy Finance Analyst Nicholas Steckler said in May that 24 of the 66 nuclear plants operating in the U.S. were either scheduled to close or wouldn’t make money through 2021.
— Peter Key