As part of US President Biden’s Investing in America agenda, the Administration, through the Department of Energy (DOE) has announced the closing of a loan guarantee of up to $1.52bn under the Inflation Reduction Act’s Energy Infrastructure Reinvestment (EIR) programme to Holtec Palisades to help finance the restoration and resumption of service of the Palisades NPP in Michigan. “This represents a first of a kind effort by DOE to restart an American nuclear power plant – generating carbon pollution-free energy and saving and expanding a union workforce in Michigan while helping strengthen America’s nuclear energy sector and advance core climate and domestic energy goals,” the statement said.

In September, Holtec International said progress continues at the Palisades NPP where restart remains on schedule. The single-unit 800 MWe pressurised water reactor began commercial operation in 1971. Operator Entergy announced in 2016 plans to close the plant. In 2021 the US 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 defueled, and its sale to Holtec completed in June 2022. However, Holtec then announced that it was applying for federal funding to allow restart of the plant. In April, DOE through its Loan Programs Office (LPO) announced the offer of a conditional commitment of up to $1.52bn as a loan guarantee to restart the plant. This has now been confirmed.

Holtec spokesman Nick Culp said all necessary funding has now been secured. Holtec has also completed all major licensing submittals to the NRC, he added. Company executives expect to receive a response from the NRC sometime in 2025. DOE said the company will use the funds for inspections, testing, restoration, rebuilding, replacement of equipment at the plant.

Palisades is on target to restart in October or later in 2025, according to Holtec spokesman Patrick O’Brien. NRC has said that preliminary results from inspections “identified a large number of steam generator tubes with indications that require further analysis and/or repair.” However, O’Brien said Holtec doesn’t expect delays or additional costs.

“Nuclear power is America’s largest source of carbon-free of 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 Secretary of Energy Jennifer M Granholm.

White House National Climate Advisor Ali Zaidi said this “will catalyse the first recommissioning of a nuclear power plant in US history…. Working with two rural electric co-ops, we are also ensuring families and small businesses in rural communities can tap into this reliable and lower-cost power.” John Podesta, Senior Advisor to the President for International Climate Policy said this project “will bring a retired nuclear power plant back to life … and deliver reliable, affordable clean power to rural areas in Michigan, Wisconsin, Indiana and Illinois.”

In addition to the workers supported by the facility’s restart, the loan guarantee will support more than 1,000 jobs during the facility’s regularly scheduled refuelling and maintenance periods every 18 months,” DOE noted. “Holtec Palisades has a project labour agreement in place with 15 trade unions that are supporting the project.”

Restart of the plant will be “a vital addition to Midcontinent Independent System Operator’s (MISO) resource mix as coal plants are retired. 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 who serve rural communities in Michigan, Illinois, and Indiana.”

Separately, the US Department of Agriculture (USDA) awarded Wolverine Power Cooperative $650m in funding under its New ERA programme to purchase about 435 MWe of Palisade’s power to serve its members throughout rural Michigan. Hoosier Energy received a $675m USDA award to lower the cost of purchasing the remaining 370 MWe alongside 250 MW of solar power from two projects to serve members in Illinois and Indiana.

DOE has also released a new Pathways to Commercial Liftoff report on nuclear, which is an update to the report released last year. This includes updated analyses and insights, reflecting the rapid learning and progress made in the industry, DOE said. In addition, Idaho National Laboratory and Oak Ridge National Laboratory published a report analysing the potential to deploy nuclear at existing and recently retired nuclear and coal power plants around the US. The report identified 60 to 95 GWe of deployment potential at nuclear plants and an additional 128 to174 GWe at coal plants.

Researched and written by Judith Perera