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Biden admin offers $1.2 billion for distressed, shut nuclear plants

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Biden admin offers $1.2 billion for distressed, shut nuclear plants
© Reuters. FILE PHOTO: One of the two now closed reactors of the San Onofre nuclear generating station is shown at the nuclear power plant located south of San Clemente, California, U.S., December 5, 2019. REUTERS/Mike Blake

By Timothy Gardner

WASHINGTON (Reuters) – The Biden administration said on Thursday it is offering $1.2 billion in aid to extend the life of distressed nuclear power plants which, for the first time, could offer funding to a plant that has recently closed.

President Joe Biden’s climate team believes nuclear power is a crucial source of virtually carbon-free electricity needed to be maintained and expanded to reach his pledge of what it calls 100% clean electricity by 2035.

But faced with rising security costs and competition from wind and solar energy and power generated with cheap , about a dozen U.S. reactors have closed since 2013, leaving 92 across the country.

Critics of nuclear power worry about the buildup of radioactive waste stored at plants around the country and warn of the risks to human health and nature, while others have called for nuclear nonproliferation.   

The funding comes from the $6 billion Civil Nuclear Credit program, created by the 2021 infrastructure law, and will be distributed by the Department of Energy (DOE).

In this second round of program funding, the money is available to plants at risk of closure within a few years, but also for the first time, plants that have stopped operating after Nov. 15, 2021.

“Expanding the scope of this… funding will allow even more nuclear facilities the opportunity to continue operating as economic drivers in local communities that benefit from cheap, clean, and reliable power,” Energy Secretary Jennifer Granholm said.

That apparently allows the Palisades plant in Michigan to apply. It closed in May 2022, nearly two weeks earlier than its planned date, after then-owner Entergy Corp (NYSE:) discovered a coolant system leak.

Holtec International, the current owner, had applied for the first round of funding, but the DOE rejected it. Holtec’s application had surprised some officials because reviving plants after closure would be a costly process and because reopening a decommissioned nuclear plant is associated with potential risks involving radioactive materials.

Holtec’s application was rejected despite it being supported by Michigan Governor Gretchen Whitmer in a letter last year to Granholm, a former governor of the state. The plant provided about 600 highly paid jobs.

(This story has been refiled to fix spelling errors in paragraph 9)

Last month, Holtec, which has said it will take more than $1 billion to reopen Palisades, applied for a different source of funding, from the DOE’s Loan Programs Office, to reopen the plant.

“This is great news for the industry, and our country, to consider nuclear so vital for our energy future that the idea of what we are trying to accomplish with Palisades, returning a shutdown nuclear plant back to operation, is something that should happen,” Holtec Director of Government Affairs Patrick O’Brien said in an email.

Last year, the DOE provided $1.1 billion in conditional CNC funding to Pacific Gas & Electric’s Diablo Canyon nuclear plant that had been set to fully shut in 2025.

Applications for the current round close on May 31.

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French climate investments to drive up national debt burden – think-tank

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French climate investments to drive up national debt burden - think-tank
© Reuters. FILE PHOTO: French President Emmanuel Macron visits Institut Curie laboratory ahead of announcements on biomedical research in Saint-Cloud, France, May 16, 2023. REUTERS/Benoit Tessier/Pool

PARIS (Reuters) – Investments that France needs to finance its transition to a low-carbon economy are set to add 25 percentage points to its debt burden by 2040, a report from the government-funded France Strategie think-tank said on Monday.

France will need to make additional annual investments of about 67 billion euros ($74 billion) – more than 2% of economic output – by 2030 to meet its objectives for reducing its dependence on fossil fuels, France Strategie calculated.

The think-tank, which is part of the prime minister’s office, said the financial effort would weigh heavily on public finances partly because the investments imply lower potential growth, which would cut tax revenues.

As a result, the debt burden would rise by 10 percentage points by 2030 and 25 percentage points by 2040, which France Strategie suggested might need to be financed in part by a temporary tax on wealthy households.

President Emmanuel Macron’s government has hoped to chip away in the coming years at France’s national debt, which currently stands at slightly more that 111% of gross domestic product after surging during the COVID crisis.

The report said the financial burden of investing in Europe’s energy transition also posed a risk in terms of international economic competition, as other major economies such as the United States and China were less concerned about budgetary constraints.

About 100 experts in French and European research groups as well as public French institutions participated in the report, which was led by economist Jean Pisani-Ferry, who previously helped Macron draft his economic programme.

($1 = 0.9084 euros)

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Crude oil largely flat; Caution ahead of debt ceiling meeting

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Crude oil largely flat; Caution ahead of debt ceiling meeting
© Reuters

Investing.com — Oil prices traded largely unchanged Monday, with traders cautious ahead of the resumption of U.S. debt ceiling negotiations while supply concerns add support. 

By 09:30 ET (13:30 GMT), futures traded 0.1% lower at $71.59 a barrel, while the contract fell 0.1% to $75.52 a barrel.

U.S. President Joe Biden and Republican House Speaker Kevin McCarthy are set to meet later this session to try and agree on a deal to raise the more than $31 trillion debt ceiling.

Concerns that a failure to come up with an acceptable compromise have weighed heavily on the market over the recent weeks, as this would result in the U.S. defaulting on its debt obligations, likely plunging the global economy into recession.

The U.S. Treasury has warned that the government could run out of money to pay its bills as soon as June 1.

That said, both crude benchmarks managed to post gains last week, ending four straight weeks of heavy declines, helped by the U.S. starting to refill its Strategic Petroleum Reserve as well as the supply disruptions in Canada, due to early wildfires in the crude-rich Alberta province. 

Additionally, the latest data from showed the U.S. oil rig count fell by 11 over the last week, to its lowest count since June 2022.

“A slowdown in U.S. drilling activity is a concern for the oil market, which is expected to see a sizable deficit over the second half of the year,” said analysts at ING, in a note. 

“Producers appear to be responding to the weaker price environment, rather than expectations for a tighter market later in the year.”

This brings the Organization of Petroleum Exporting Countries and allies, known as OPEC+, firmly into focus, with its next meeting in early July. 

The cartel surprised the market with an output cut at the last meeting, which came into effect at the start of this month. However, this has done little to support crude prices, implying the members may be looking at a further reduction in production.

The fact U.S. producers are not increasing in number will be good news for OPEC+, ING added, “as it suggests that they will be able to continue supporting prices without the risk of losing market share to U.S. producers.”

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California grid operator signs off on $7.3 billion of power lines

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California grid operator signs off on $7.3 billion of power lines
© Reuters. FILE PHOTO: A woman jogs by power lines, as California’s grid operator urged the state’s 40 million people to ratchet down the use of electricity in homes and businesses as a wave of extreme heat settled over much of the state, in Mountain View, Californi

(Reuters) – California’s electric grid operator has approved a plan expected to cost $7.3 billion for 45 new power transmission projects over the next decade and made it easier for new power plants in high-priority areas to connect to the grid.

The projects will support the development of more than 40 gigawatts (GW) of new generation resources, the California Independent System Operator (CAISO) said on Thursday.

“With electrification increasing in other sectors of the economy, most notably transportation and the building industry, even more new power will be required in the years ahead,” the CAISO said.

The vast majority of the transmission projects will be built in California, with some in neighboring Arizona, it said.

The power lines recommended by CAISO’s 2022-2023 Transmission Plan will allow the state’s grid to add more than 17 GW of solar resources, 8 GW of wind generation, 1 GW of geothermal development, and battery storage projects.

CAISO will prioritize connecting power plants to the grid in specific geographical zones identified by its plan where developing new power lines and plants “make the most economic and operational sense.”

The grid operator also approved proposed reforms to account for “increasing levels of net load forecast uncertainty between day-ahead and real-time markets … as the generation fleet evolves towards a cleaner, but more variable, resource mix.”

It projected that its transmission plan next year could include the need to add 70 GW of new power to the grid by 2033, rising to 120 GW as the state seeks to meet its goal of a carbon-free power system by 2045.

Power supply in the U.S. West is vulnerable to extreme heat as it relies on regional energy transfers to meet demand at peak or when solar output is diminished, the North American Electric Reliability Corp (NERC) said in its summer outlook on Wednesday.

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