(Reuters) - Entergy Corp's over 40-year old Indian Point nuclear power plant will be shut by 2021 because of concerns for the safety of millions of New Yorkers in and around the Big Apple, Governor Andrew Cuomo announced on Monday.

After fighting for nearly a decade to renew the plant's licenses, Entergy has agreed to shut the reactors, which supply about a quarter of New York City's power needs, giving the state time to find alternative power sources.

"I am proud to have secured this agreement with Entergy to close the facility 14 years ahead of schedule to protect the safety of all New Yorkers," Cuomo said in a statement.

The governor said Indian Point had been plagued by numerous safety and operational problems, including faulty bolts, and various leaks and fires.

The densely populated surrounding region lacks viable evacuation routes in the event of a disaster, said Cuomo, and the plant was once cited as the most vulnerable to earthquakes in the country.

Of the plant's two operating reactors, first licensed to operate in 1973 and 1975, Unit 2 will close as early as April 2020 and Unit 3 in April 2021.

New York has been developing contingency plans for years to replace the power supplied by Indian Point, which is located in Buchanan, along the Hudson River about 45 miles (72 kilometers) north of midtown Manhattan.

The plant produces about 2,069 megawatts of electricity, enough to meet 25 percent of the power used by New York City and adjacent Westchester County.

Cuomo said replacement power would be in place that adds "no new carbon emissions" and would have "negligible cost impact to ratepayers."

A couple of carbon-free projects that could replace some of the power generated at Indian Point are the Champlain Hudson Power Express project being developed by Transmission Developers Inc, an affiliate of Blackstone Group LP, and an offshore wind farm being developed by a unit of Norwegian oil company Statoil ASA in the Atlantic Ocean, off Jones Beach.

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The $2.2 billion Champlain Hudson project can transmit up to 1,000 MW of wind and hydropower produced both in upstate New York and Canada and deliver it to the New York metro area, while Statoil is looking to build a 400-600 MW wind farm off Long Island.

A few natural gas-fired projects that are not carbon free but could still help replace some of Indian Point's power include Advanced Power's 1,000-MW Cricket Valley project in Dover, Competitive Power Ventures' (CPV) 650-MW Valley plant in Wawayanda and NRG Energy Inc's proposed 1,040-MW Astoria repowering project in Queens.

CPV has said in past releases that its Valley project, which is under construction and has been reported to cost $900 million, will be completed in 2018.

Advanced Power expects to complete its $1.5 billion Cricket Valley project by the fourth quarter of 2019, according to a statement by BlackRock, an investor in the project.





ENTERGY FOCUSING ON REGULATED UNIT

The shutdown comes as New Orleans-based Entergy has been pulling back from its merchant nuclear business over the past few years to concentrate on its regulated utilities in the U.S. South. Indian Point was the only unregulated nuclear plant it had tried to keep.

"The shutdown will complete Entergy's exit from its merchant power business because of sustained low wholesale energy prices," Entergy said in a statement.

"Record low gas prices, due primarily to supply from the Marcellus Shale formation, have driven down power prices," said Bill Mohl, president of Entergy Wholesale Commodities.

Entergy has been trying to renew the federal licenses for the two Indian Point reactors since 2007. Those licenses expired in 2013 and 2015, but the units can continue to operate so long as the renewal process is ongoing.

Shares of Entergy, which has been focusing on its utilities in the South, were down 2.4 percent at $71.45 on Monday afternoon.





(Reporting by Scott DiSavino and David Gaffen; Editing by Marguerita Choyediting and Lisa Von Ahn)