For the first time, a decommissioned nuclear power plant in the USA was put back into operation thanks to government support. The Department of Energy (DOE) announced a $1.52 billion loan to support the rehabilitation of a nuclear power plant in Covert Township, Michigan.
Although still a controversial option among environmentalists, nuclear energy could be poised for a renaissance as an alternative to fossil fuels. Nuclear power plants are already the largest source of carbon-free energy in the U.S. and can replace renewable energy as solar and wind power decline.
“It’s a powerful comeback story for clean energy.”
“It’s a powerful comeback story for clean energy,” White House national climate adviser Ali Zaidi said in a press release yesterday.
The Department of Energy awarded the energy technology company Holtec the loan to restart the Palisades nuclear power plant, which was decommissioned in 2022. As part of its plan to exit the nuclear energy business, utility Entergy sold the site to Holtec, which initially sought to decommission the five-decades-old facility.
As the Biden administration seeks to achieve its climate goals using nuclear power and U.S. electricity demand increases through data centers and manufacturing, the private sector has become more optimistic about nuclear energy. Microsoft signed a deal in September to buy energy from the decommissioned Three Mile Island nuclear power plant if it can be restarted by 2028.
Holtec is pursuing an accelerated timeline and aims to bring Palisades back online by the end of next year. Once the 800-megawatt plant is operational again, it should be able to generate enough electricity for 800,000 households. The plant is expected to remain in operation until at least 2051 and is expected to create up to 600 union jobs. If successful, it would be the first restart of a decommissioned nuclear power plant in the United States. Holtec says the restart “lays the foundation” for its larger nuclear energy ambitions to deploy next-generation small modular reactors in Michigan.
In order for Palisades to return to service, Holtec must first obtain approval from the Nuclear Regulatory Commission. And in the past, nuclear power plant projects have repeatedly experienced construction delays and rising costs. This is one of the factors that has held the industry back for years. Additionally, nuclear energy still faces opposition from environmental justice advocates concerned about the risks associated with mining uranium and storing nuclear waste.
Last year, a coalition of 115 organizations sent a letter to Energy Secretary Jennifer Granholm calling on the Energy Department to reject funding requests from Holtec. “Restoring operation of this nuclear reactor would further degrade and endanger the environment and human health, as well as impact culturally significant sites in the area, including potential burial sites,” Tom BK Goldtooth, executive director of the Indigenous Environmental Network, said in a news release at the time .
In its announcement yesterday, the Energy Department claimed that the Palisades project would support the Biden administration's environmental justice initiative, which ensures that 40 percent of the “benefits” from federal investments in clean energy flow to marginalized communities. It says the facility is located in a “disadvantaged community” where residents pay higher energy costs than 97 percent of other communities in the United States.
In addition to the DOE loan to Holtec, the Agriculture Department also announced $1.3 billion in grants to two rural electric cooperatives to reduce the cost of electricity from the Palisades plant and renewable energy sources. The money for the grants and loans comes from the Inflation Reduction Act, the Biden administration's major climate and clean energy spending package.