The Biden administration is set to loan upwards of $1.5 billion to Holtec International Corp. to restart its Palisades nuclear power plant in Michigan, paving the way for the first time a deactivated nuclear reactor would reopen in the United States, according to sources familiar with the matter.
Founded in 1986 by Dr. Kris Singh, Holtec operates in a number of countries across the globe including in India, Brazil, Spain, the UK and Ukraine. The company specializes in nuclear fuel and waste management, nuclear plant decommissioning, and heat transfer equipment and services, among other things.
The funding, with conditional backing from the U.S. Energy Department, may be released as soon as March this year and comes as the Biden administration turns its focus to the nation’s nuclear plants as a means to help it meet its climate goals, which includes a scheme to decarbonize its electricity grid by 2035.
The plant, which was shut down in May, 2022 had been in operation for more than 50 years and set a world record for a plant of its kind continuously generating electricity for 577 days without refueling, according to Power.
The reactor, which had a capacity of around 800 MW, was retired by Entergy, its previous operator, because market conditions at the time had “changed substantially” and more economic alternatives were identified to provide electricity to the region, the company explained at the time.
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Since 2013, more than a dozen reactors have been shut down in the U.S. as competition from cheaper sources, such as natural gas and renewables, came online.
The U.S. Energy Department has warned that as many as half of all nuclear reactors in the U.S. are at risk of being shut down due to economic factors.
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Holtec ‘very optimistic’ about Michigan nuclear power comeback
Holtec spokesman, Nick Culp, said the company is “very optimistic” about the Energy Department loan process, and that the reopening of the reactor would be a “historic opportunity” for Michigan and the country.
“This is a historic opportunity for the country and Michigan. As we transition away from fossil fuels, nuclear is going to be a critical part of not only reaching our climate goals but doing so in a way that ensures the lights stay on,” he said.
Biden’s climate legislation will back the $1.5 billion with a loan guarantee program that was designed to revitalize aging plants, and if successful, the Palisades site will be the first reactor financed under Biden’s scheme.
Holtec filed to restart the reactor in October last year following a series of public meetings with the Nuclear Regulatory Commission (NRC).
At the time, Jean Fleming, Holtec International’s Vice President of Licensing, Regulatory Affairs and Probabilistic Safety Analysis, said, “Our licensing submittal is a significant step in exploring the potential for Palisades to continue contributing to the region’s energy and economic needs, while adhering to the highest safety and regulatory standards. We understand the importance of nuclear power in our nation’s energy mix and the critical role it plays in providing safe, reliable, carbon free electricity here in Michigan.”
The Palisades plant began commercial operation in 1971 and Entergy announced its plan to close it in 2016, when the NRC approved to transfer its operating license to Holtec for the purposes of decommissioning it.
However, Michigan’s 2024 state budget included $150 million in funding for the plant’s restart. And in September 2023, Holtec announced that it had signed a long-term purchase agreement with the Wolverine Power Cooperative, which committed to purchasing two-thirds of the electricity generated from the reopened plant.
Following the deal, the President of Holtec Nuclear Generation, Kelly Trice, said, “Holtec plans to build up the Palisades site into a mega-clean energy provider to the region with the restarted palisades power plant as its centerpiece.”