Uncle Sam Lends $1.5B To Reignite Michigan Nuclear Plant In 2025

The Biden administration has announced plans to reignite a shuttered Michigan nuclear power plant with a $1.5 billion loan that, combined with other nuclear announcements yesterday, suggests the US federal government is right now all in on nuclear energy.

The 800-megawatt Holtec Palisades plant, located on Michigan's southwest coast in a relatively low-populated area, shut down in 2022 mainly due to it struggling to afford to stay operational while competing against cheaper fossil fuels.

For one thing, its steam generator tubes are not in good condition, needing hundreds of millions of dollars to replace at one point, and remain a problem for Holtec, with further inspections and potentially repairs required.

If or when the station is brought back online sometime in the fourth quarter of 2025, said the US Department of Energy (DoE), it'll be the first time a retired nuclear power plant in the country has been restarted. Licensing approval still needs to be granted following upgrades at the site, and power purchase agreements (PPAs) have already been signed to keep the plant running until 2051. 

Those PPAs aren't happening by accident, either: Along with the $1.5 billion loan to Holtec International to upgrade and restart Palisades, the US Department of Agriculture (USDA) announced yesterday it had awarded $1.3 billion in grants to the Wolverine Power Cooperative and Hoosier Energy, located in Michigan and Indiana, respectively, to fund the purchase of power generated by Palisades and other clean energy sources. 

Wolverine will purchase 435 MW of power from Palisades using $650 million in grants from the USDA's Empowering Rural America project, while Hoosier is purchasing 370 MW using a $675 million grant from the same source.

In other words, not only is the atomic plant getting money to fire up again, organizations are getting handouts to buy the generated electricity and provide it to homes and businesses; this is supposed to also help create jobs and cut costs for folks.

"We can continue supporting a more prosperous future for rural communities by accelerating the transition to clean energy, keeping monthly bills low for American families and investing in a strong rural workforce," Agriculture Secretary Tom Vilsack said of the funding. 

Nick Culp, senior manager of government affairs at Holtec Palisades, told The Register that most of the work needed to restart the plant isn't excessive - more like a standard refueling and maintenance cycle with some extra steps.

"We knew Palisades was shutting down in advance, so we deferred a number of maintenance tasks," Culp said. "Now we're going back and completing that work."

Culp said the latest project the team has been working on involves preparing the turbine deck to resume operations, as well as getting new employees trained up. When Palisades was in full operation, 600 people were employed, but after shutting down, it was reduced to 220 full-time employees. Culp said rehiring has begun, and a number of former Palisades employees are returning to their old jobs, too.

Aside from that, there's not a lot of major overhauling to be done, Culp told us, because the first three years of post-shutdown operation were only supposed to involve removing fuel from the reactor - a task that still hasn't been completed. Luckily enough, some of the fuel in the reactor is still fresh, so it'll remain in place to kick-start the reactor back online next year.

Nuclear power is America's largest source of [carbon-free electricity], supporting hundreds of thousands of direct and indirect jobs across the country

Using nuclear fission, of course, Palisades will also help green up the Midcontinent Independent System Operator's grid by eliminating approximately 4.47 million metric tons of greenhouse gas annually, which will equate to the annual emissions of 882,000 homes when projected out over the 25 years the new Palisades project is planned to run. 

"Nuclear power is America's largest source of [carbon-free electricity], supporting hundreds of thousands of direct and indirect jobs across the country," said US Energy Secretary and former Michigan Governor Jennifer Granholm. "[Nuclear] will play a critical role in tackling the climate crisis and protecting public health and the environment from its impacts." 

Holtec said it intends to use Palisades' refiring as a foundational part of its plan to push for small modular reactors (SMRs) to be deployed in Michigan, starting with Palisades itself, where the plant owner intends to install two of its SMR-300 units by 2030. 

Holtec still has to get regulatory approval for its SMR design, which Culp told us the company is working on now, while also exploring plans to install more of them around Michigan.

An industrial nuclear glow up

Devastating and well-publicized accidents in the 1970s and 1980s turned the world off from nuclear power for decades, but modern technology - not to mention the need for Earth to go on a greenhouse gas diet - has again made splitting the atom an attractive alternative to renewables and carbon-spewing fossil fuels in some quarters. 

It's reached the point in the climate change crisis where energy experts are warning nuclear energy will be necessary if the world intends to meet 2050 decarbonization goals - especially given the glut of energy consumption brought on by AI. 

• Oracle wants to power 1GW datacenter with trio of tiny nuclear reactors
• Amazon to add 15 datacenters to atomic-powered campus
• As AI booms, land near nuclear power plants becomes hot real estate
• Microsoft cash to help reignite Three Mile Island atomic plant

The Dept of Energy knows this, which is part of the reason it released an updated version of its Pathways to Commercial Liftoff report for advanced nuclear energy yesterday alongside those other announcements. 

The document [PDF], which covers everything from what modern nuclear technology could do for the environment to ideas on how to implement it, points out that nuclear energy already provides around 20 percent of the United States' electricity generation, and nearly half of domestic carbon-free electricity.

The DoE predicts the US will need at least 700 to 900 gigawatts of additional clean energy to meet its net-zero goals, and said it believes existing nuclear power plants in the nation have the potential to add an additional 60 to 95 GW with further funding. Shuttered and aging coal plant sites, if converted to nuclear, could add as much as 174 GW more, the DoE said. Holtec is exploring abandoned coal plants in Michigan as possible locations for its SMRs, Culp said.

The report calls for the construction of modern reactors like SMRs that use low-pressure water or molten salt as a heat sink, making them safer than traditional nuclear reactors. However, some concerns remain about the waste such modern reactors produce, and how to acquire enough fuel.

"DOE and our partners across the federal government are working around the clock to ensure this vital source of clean electricity - and the vibrant workforce it supports - continues to power our nation for generations to come," Granholm said. ®