Once complete, project will be the first recommissioning of a retired nuclear power plant in US history
The US Department of Energy (DOE) announced the closing of a loan guarantee of up to $1.52bn (€1.37bn) to Holtec Palisades to help finance the restoration and return to commercial operation of the Palisades nuclear power station in Michigan.
The DOE arranged the loan through its Loan Programs Office under the Inflation Reduction Act’s Energy Infrastructure Reinvestment programme. It represents a first-of-a-kind effort by the DOE to restart a US nuclear power plant.
“Nuclear power is America’s largest source of carbon-free electricity, supporting hundreds of thousands of direct and indirect jobs across the country and will play a critical role in tackling the climate crisis and protecting public health and the environment from its impacts,” said US energy secretary Jennifer Granholm.
“Under President Biden and Vice President Harris’ leadership, 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.”
The single-unit 805-MW pressurised water reactor plant, on the shores of Lake Michigan, ceased operations in May 2022. It will be brought back online and upgraded to produce power until at least 2051, subject to US Nuclear Regulatory Commission (NRC) licensing approvals.
The NRC has also issued new guidance meant to ensure the restart is performed safely. Once complete, the project will be the first recommissioning of a retired nuclear power plant in US history.
Holtec Palisades has already signed long-term power purchase agreements for the full power output with rural electric co-ops Wolverine Power Cooperative and Hoosier Energy, which serve rural communities in Michigan, Illinois and Indiana.
Earlier this month, Wolverine and Hoosier were among 16 rural electrical cooperatives announced by the US Department of Agriculture (USDA) to receive a share of more than $7.3bn in financing for rural electric cooperatives to build clean energy for rural communities across the country through its Empowering Rural America (New ERA) programme.
On Monday (30 September), the USDA announced the award of more than $650m to Wolverine and $675m to Hoosier. Wolverine will use the funding to purchase 435 MW of power from Palisades and Hoosier will use it to procure 369 MW of nuclear energy from Palisades and 250 MW of renewable energy annually.
Plant ‘On Track’ For October 2025 Restart
Holtec said in August that it remained on track for restarting the mothballed facility in October 2025 – if the NRC sticks to the schedule the company has laid out for completing all necessary inspections.
The company said it had 457 employees and 350 contractors employed for Palisades and expected those numbers to rise to 600 full-time employees and 1,000 contractors once it is fully staffed.
New Jersey-based Holtec bought Palisades, which was first connected to the grid in 1971, from previous owner Entergy in 2022 to decommission the facility, which had struggled to compete with natural gas-fired plants and renewable energy.
In early 2023, Holtec applied to the DOE for federal loan funding to repower the facility.
That was followed by a “rigorous” review of the loan application by the DOE and third-party advisors to consider technical, market, financial, credit, legal, and regulatory aspects, among others, Holtec said.
Details of the loan guarantee published in the Federal Register said it is for “general restoration and maintenance activities” that would support the potential future resumption of power generation activities at Palisades.
In addition to the main 805 MW reactor, Holtec intends to use the Palisades site as the location for its first two small modular reactor units, which would potentially add an additional 800 MW of generation capacity.
