(Reuters) - U.S. power company Constellation Energy Corp said on Tuesday that the U.S. Inflation Reduction Act (IRA) significantly strengthened the long-term outlook of its nuclear fleet and plans to produce hydrogen.
"Support for carbon-free energy in the legislation creates opportunities for us to extend the life of our nuclear fleet past mid-century and pursue hydrogen production to slash emissions from difficult-to-decarbonize sectors of the economy," Constellation CEO Joe Dominguez said in the company's third-quarter earnings release.
Now there are both state and federal policies that support nuclear power, Dominguez said.
The IRA includes federal tax credits for clean energy technologies including existing nuclear plants and hydrogen production.
The Nuclear Production Tax Credit ( PTC (NASDAQ:PTC)) provides a federal tax credit of up to $15 per megawatt hour from 2024-2032.
The Hydrogen PTC provides a 10-year federal tax credit of up to $3 per kilogram for clean hydrogen produced after 2022 from facilities that begin construction prior to 2033.
To keep its nuclear plants in service longer, Constellation said in October it would seek 20-year license renewals for its Clinton and Dresden plants in Illinois that would, if granted, extend the life of Clinton until 2047 and Dresden until 2049 (Unit 2) and 2051 (Unit 3).
Last summer, Exelon Corp (NASDAQ:EXC), which spun off Constellation earlier this year, was looking to retire Dresden and Byron, another Illinois nuclear plant, unless the plants received state or federal financial support.
Exelon said the reactors were either losing money or were in danger of losing money in the future.
To stop Exelon from shutting the reactors, which produce lots of power without carbon emissions, Illinois provided about $700 million in subsidies.
Separately, Constellation said it expects to start producing hydrogen at its Nine Mile Point nuclear plant in New York by the end of the year.