How a Shutdown in Michigan Could Pave the Way for More Nuclear Power – NBC New York

• The Palisades Nuclear Power Plant in Covert, Michigan, could become the first nuclear reactor restarted in U.S. history.
• The plant’s owner, Holtec International, plans to restart the plant in late 2025, subject to review and approval by the Nuclear Regulatory Commission.
• Holtec plans to expand the plant in 2030 with small modular reactors, a new technology that could accelerate the deployment of nuclear power in the future.

The Palisades Nuclear Power Plant on the shores of Lake Michigan has become a part of history, a reminder of an era when nuclear energy was considered the future.

The reactor in Covert, Michigan, about 70 miles southwest of Grand Rapids, ended operations in May 2022 after more than 40 years of providing electricity to the industrial Midwestern state.

The reactor closures were part of a decade-long wave of reactor shutdowns in the U.S. as nuclear power struggled with competition from cheap and abundant natural gas amid the shale boom and the rapid expansion of renewable energy.

Moreover, the power source has long been controversial, with opponents concerned about the consequences of waste produced during the process or the potential for radiation leakage in the event of an accident.

But Palisades is now poised to become the first reactor in U.S. history to reopen after being shut down. Lawmakers on both sides of the political divide, technology companies and leading utilities increasingly see nuclear power as a critical source of reliable, carbon-free energy to meet growing U.S. electricity demand while cutting emissions to address climate change.

Holtec International, the private owner of Palisades, aims to have the plant operating again by the end of 2025 with the help of up to $1.5 billion in loans from the Energy Department and a $300 million grant from the state of Michigan.

Plans to reopen Palisades are currently under review by the Nuclear Regulatory Commission. If successful, Palisades could provide a roadmap for other shuttered plants to resume operations, such as Three Mile Island in Pennsylvania.

“This is a bridge to our small modular reactor program,” said Kelly Trice, Holtec’s president, referring to a long-term plan to nearly double the facility’s electricity production by 2030 with small modular reactors. The new technology, which could be the first of its kind on the U.S. grid, promises to accelerate the deployment of nuclear power plants in the future.

“Our goal is to increase the number of power plants in the country and around the world equipped with small modular reactors,” he said.

Roadmap to Restarting Reactors

Florida-based Holtec bought Palisades in 2022 with the intention of dismantling it. Previous owner Entergy closed the facility as its finances deteriorated under pressure from competition with cheap natural gas.

But Michigan Gov. Gretchen Whitmer has made restarting Palisades a priority, saying it could support the state’s goal of producing all of its energy from renewable sources by 2040. Whitmer signed bipartisan legislation that provided state funding and supported Holtec’s application for federal funding.

“It wasn’t down for so long that it was irreversible,” Trice said. “That plant had a 10-year period where we weren’t going to do any major decommissioning.”

The restart of Palisades could mark a turning point for the nuclear industry after a decade in which dozens of reactors were shut down across the country. The 800-megawatt reactor would provide enough power for more than 800,000 homes.

The United States is facing a historic increase in electricity demand from AI-enabled data centers, the return of domestic manufacturing and vehicle electrification, and the broader economy. Data centers and electric vehicles alone are expected to add 290 terawatt-hours of demand by 2030—equivalent to Turkey’s electricity consumption, according to a recent report by Rystad Energy.

Nuclear energy is the most reliable source of energy, generating maximum power 93 percent of the time without emitting carbon dioxide. It is nearly four times more reliable than solar energy and three times more reliable than wind energy, according to the Energy Information Administration.

Utility executives have warned that failing to meet that demand could threaten U.S. economic growth. Southern Company Chief Executive Chris Womack said in June that the U.S. needs to build a significant number of new nuclear plants to meet the nation’s growing energy needs. The U.S. and a coalition of more than 20 other countries pledged in December to triple nuclear power by 2050.

But building new nuclear plants is slow and expensive. Sometimes plants can get bogged down in legal challenges. Southern recently completed its first new plant in decades, but the project is years behind schedule and billions of dollars over budget.

Trice said restarting the reactor could be “easier, cheaper and faster” than building a new one, though he stressed that depends on how far along the decommissioning process is.

“There are a few other plants that have talked to us about how to do this,” the executive said. “And we hope they will. From that standpoint, maybe this will become a model for a few plants where it fits.”

“First on the grid”

Holtec hopes to expand Palisades with two small modular reactors, or SMRs, of 300 megawatts each, which would nearly double its capacity to 1,400 megawatts — enough power for 1.4 million homes.

The company aims to begin work by the end of 2027, Trice said. He expects the first SMR to be operational in mid-2030.

“Our goal is to be first on the grid,” Trice said.

SMRs are seen as an important path to expanding nuclear power because they promise to reduce capital costs, a major obstacle to building new plants. They use a pressurized water reactor, much like traditional plants. However, SMRs are prefabricated in parts and then assembled on site.

“It’s a smaller, simpler installation by comparison — easier to operate,” Trice said.

Once the first SMR is built, Holtec plans to build an order book to “continuously produce components for any installation that we need,” he said. “We’ve had more utilities than I can count that have contacted us and wanted to be on the list,” Trice said.

Big Tech companies are also showing growing interest in nuclear power, including Holtec’s SMR program. While tech giants are building energy-hungry data centers to support artificial intelligence, they still hope to meet their climate goals.

“We’ve talked to almost all of them, especially the big ones we’ve talked to,” Trice said. “They’re all interested in zero-emission, green, baseline energy.”

Possible Three Mile Island Project

Constellation Energy, the largest U.S. nuclear operator, has suggested that Palisades could serve as a model for restarting Three Mile Island near Middletown, Pennsylvania. The company owns the facility’s Unit 1 reactor, which ceased operations in 2019. (Unit 1 is not the reactor that partially melted down in 1979 in the worst nuclear accident in U.S. history.)

“We saw what happened with Palisades, of course. I thought it was brilliant,” CEO Jose Dominguez said on a call about Constellation’s first-quarter results in May.

Constellation is considering “a lot of different possibilities,” and Three Mile Island “would probably be one of the ones we would think about,” Dominguez said.

“We’re at a point where we think it’s technically feasible,” Kathleen Barrón, Constellation’s chief strategy officer, told CNBC about the Three Mile Island restart. “But there are a lot of economic, commercial and regulatory issues that we’re still evaluating.”

NextEra Energy, the largest renewable energy operator in the U.S., is considering restarting the Duane Arnold Energy Center in Palo, Iowa. It closed in August 2020.

“If we could do something with Duane Arnold, there would be opportunity and demand from the market,” NextEra Chief Executive John Ketchum said during a July 24 second-quarter earnings conference call.

“We’re looking at it,” Ketchum said. “But we would only do it if we could do it in a way that was essentially risk-free, with a lot of mitigation around the approach. There are a few things we would have to work on.”

But Palisades, Three Mile Island and Duane Arnold all recently shut down. Finding more plants to restart could prove difficult, said Doug True, director of nuclear energy at the Nuclear Energy Institute.

“It’s getting harder,” True said. “A lot of these facilities have already started the deconstruction process that comes with decommissioning, and the facility hasn’t been prepared in a way that would allow it to be put back into operation in any way.”

True said Three Mile Island and Duane Arnold “would require a lot of thought and effort to see what it would take to get them going again.”