The US Department of Energy (DOE) through its Loan Programs Office (LPO) has announced the offer of a conditional commitment of up to $1.52bn as a loan guarantee to restart the 800 MWe Palisades NPP in Michigan. The project aims to bring back online the Palisades plant, which ceased operations in May 2022, and to upgrade it to produce power until at least 2051, subject to Nuclear Regulatory Commission (NRC) licensing approvals.
The single-unit 800 MWe pressurised water reactor at Palisades NPP began commercial operation in 1971. Operator Entergy announced in 2016 announced plans to close the plant in 2021 the Nuclear Regulatory Commission (NRC) approved transfer of the licence from Entergy to Holtec in preparation for its decommissioning. The reactor was removed from service by Entergy in May 2022, and defuelled. Its sale to Holtec was completed in June 2022 and Holtec then announced that it was applying for federal funding to allow restart of the plant.
Holtec Palisades is the first project to be offered a conditional commitment through the Energy Infrastructure Reinvestment (EIR) programme. EIR can finance projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or enable operating energy infrastructure to avoid, reduce, utilise, or sequester air pollutants or greenhouse gas emissions. This project will repower existing energy infrastructure that has been non-operational and support reinvestment in the community.
In addition to the 800 MWe reactor, Holtec intends to use the Palisades site as the location for its first two small modular reactor (SMR) units, which will not be part of the project that may be financed under this conditional commitment. The two units will potentially add an additional 800 MW of generation capacity at the site, take advantage of existing infrastructure, and spur the domestic development of new reactor technologies.
Michigan Governor Gretchen Whitmer said: “Once open, Palisades will be the first successfully restarted nuclear power plant in American history, driving $363m of regional economic impact and helping Michigan lead the future of clean energy.”
The project is anticipated to avoid 4.47m tonnes of CO2 emissions a year. Once operational, the Palisades Nuclear Plant will provide around-the-clock, zero-emissions electricity generation – a vital addition to Midcontinent Independent System Operator’s (MISO) resource mix as coal plants are retired. Holtec Palisades has already procured signed long-term Power Purchase Agreements (PPAs) for the full power output with rural electric co-ops Wolverine Power Cooperative and Hoosier Energy in Michigan, Illinois, and Indiana.
Energy Secretary Jennifer M Granholm said this brings Palisades “one giant step closer to becoming the first successfully restarted nuclear power plant in the United States”. She added: “Nuclear power is our single largest source of carbon free electricity, directly supporting 100,000 jobs across the country and hundreds of thousands more indirectly.”
Holtec’s application for DOE LPO for federal loan funding was followed by a rigorous review by the DOE and third-party advisors to consider technical, market, financial, credit, legal, and regulatory aspects, among others. The conditional commitment is subject to final approval, which is dependent on Holtec’s meeting loan closing conditions. In addition to federal loan funding, the repowering initiative has received critical financial support from the State of Michigan. In addition, Holtec is separately making a substantial out-of-pocket capital investment in the restart programme.
Image: Palisades nuclear power plant (courtesy of Holtec)
