The US Department of Energy (DOE) has signed the credit award and payment agreement to finalise terms for the $1.1bn credit payments for the Diablo Canyon nuclear power plant in California under the Civil Nuclear Credit (CNC) programme.

Located near Avila Beach, the Diablo Canyon plant is owned and operated by Pacific Gas and Electric. It features two Westinghouse pressurised water reactors that have a combined nameplate capacity of 2.25GW.

The nuclear power plant generates nearly 18GWh of clean electricity per year and makes up almost 9% of the total power generated in California.

Unit 1 and Unit 2 of the American nuclear facility were scheduled to stop commercial operation in 2024 and 2025, respectively. The finalisation of the agreement enables the Diablo Canyon power plant to continue its operation.

The first payment of awards is planned for 2025 based on the operation of the Diablo Canyon facility in 2023 and 2024.

US DOE grid deployment office director Maria Robinson said: “Preserving the nation’s nuclear fleet is critical not only to reaching America’s clean energy goals, but also to ensuring that homes and businesses across the country have reliable energy.

“Today’s announcement demonstrates the Administration’s commitment to domestic nuclear energy by preserving existing generation, while we continue to support a stronger nuclear power industry.”

The Diablo Canyon power plant was conditionally selected for CNC credits in November 2022.

Administered by DOE’s grid deployment office and funded by President Biden’s Bipartisan Infrastructure Law, the $6bn CNC programme supports the continued operations of safe and reliable nuclear energy facilities.

The programme also supports thousands of good-paying clean energy jobs along with avoiding an increase in carbon emissions.