A decommissioned nuclear power plant in Michigan is being brought back to life.
Pushed by a growing need for carbon-free energy, the Palisades nuclear power plant will be the first in the U.S. to be recommissioned after shutting down.
The Palisades plant was built in the late 1960s and began running in 1973. It was purchased in 2006 by Louisiana-based electricity producer Entergy Corp ETR, which ran it until 2022.
Although the plant had a license extension that allowed it to be active until 2031, Entergy chose to shut it down, citing the high costs associated with running a nuclear power plant.
The plant was sold to nuclear equipment provider Holtec International, which was in charge of taking the plant out of commission.
In 2022, Holtec announced plans to re-open the facility, something that has never been done before in the U.S.
This year, the U.S. Department of Energy announced a commitment of $1.52 billion in loans to finance the restoration and resumption of service of the plant in the hands of Holtec.
According to a WSJ report, the company is now working on restoring the facility to modern-day standards. The plant will be back online by October 2025, according to the company's plans.
Nuclear Gets Revamped
A growing need for electricity is behind the renewed interest in nuclear energy.
In a recent interview with Elon Musk, former President Donald Trump expressed shock at the amount of electricity required to fuel artificial intelligence systems.
The AI revolution is doubling demand for data center power and will eventually consume 25% of all U.S. power by 2030, according to Arm Holdings PLC – ADR ARM CEO Rene Haas.
According to Goldman Sachs, data centers will use 8% of U.S. power by 2030, up from 3% in 2022.
Former Microsoft CEO Bill Gates recently said to "not go overboard" with panic over energy-hungry AI systems, as investment from Big Tech companies into clean energy might help boost the shift toward green energy production.
The Biden administration has placed a high bet on the ability of nuclear power to free the country from its dependency on fossil fuels to produce energy.
Fossil fuels account for 60% of U.S. electricity production, according to the Energy information Administration.
The Biden White House has set the goal of having a zero-emission power grid by 2035 and has included several tax credits and other incentives for nuclear within the Inflation Reduction Act of 2022.
The government recently set-up a $2.7-billion investment in U.S.-made uranium to decrease dependency on Russian imports.
Interest in nuclear power dropped as fracking practices opened the floodgates for cheap natural gas, which lowered the cost of burning gas to produce electricity.
Isolated nuclear plant accidents helped strengthen public rejection of the technology. These include the meltdown of the Three Mile Island reactor in 1979, the Chernobyl disaster in 1986 in Ukraine and the Fukushima accident in Japan in 2011.
High construction costs and continuing concerns regarding the storage of nuclear waste continued to weigh against the development of new nuclear energy projects in recent decades.
New Projects Come Online
The nuclear sector might be getting a new push. A Pew Research Center survey from May of this year found that support for nuclear power in the U.S. has grown consistently throughout the last 10 years.
Today, 56% of U.S. adults support the development of nuclear energy projects.
The U.S. has 94 active nuclear reactors, down from a peak of 111 in the late 1990s. These exist in 54 nuclear power plants in 28 states.
The two newest reactors launched commercial operations in 2023 and 2024 at the Alvin W. Vogtle Electric Generating Plant in Georgia. They're operated by Southern Nuclear, a subsidiary of Southern Co SO.
The two reactors cost $35 billion to build, according to E&E News.
Some companies working on advanced reactor designs are looking to obtain licenses from the Nuclear Regulatory Commission to build new reactors.
Nuscale Power Corp SMR, a company developing small modular reactors, canceled its project to build a six-reactor, 462-megawatt plant in Utah in 2023 after several municipalities pulled out due to high construction costs, Reuters reported.
The company is expecting to deploy two dozen small modular reactors for plants in Ohio and Pennsylvania, per E&E News.
Other companies are developing new projects that still need demonstrations to become mainstream technology.
Kairos Power is developing a test reactor in Oak Ridge, Tennessee to test its fluoride salt-cooled, high temperature reactor technology. The company has received a $303-million pledge from the Department of Energy to complete this project.
Earlier this month, TerraPower, a company founded by Bill Gates, started building its first advanced reactor in Wyoming, which, like Kairos', doesn't use water for cooling.
ETFs To Watch
- The VanEck Uranium and Nuclear Energy ETF NLR which follows the nuclear power sector, gained 0.21% Tuesday and is up 2.4% in the last five trading days.
- Global X Uranium ETF URA, following the global uranium market, is up 4.3% in the last five trading days.
Read Next:
Palisades Nuclear Plant photo via Nuclear Regulatory Commission.
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