US seeks to restart Palisades nuclear plant, shut down in 2022

The U.S. Department of Energy, through its Loan Programs Office, has conditionally committed to providing a loan guarantee of up to USD 1.52 billion (approx. CZK 35.56 billion) to Holtec Palisades. The move is intended to enable the restart of the Palisades power plant, which was shut down in May 2022. The project could become the first case in the United States of a nuclear power plant resuming commercial operations after they have ended.

Holtec agreed to buy the 800 MWe pressurized water reactor from its then-owner and operator Entergy in 2018, before its planned closure, with the aim of decommissioning the plant. The acquisition was completed in June 2022, shortly after the reactor was permanently shut down. At the time, Holtec planned to complete the plant's decommissioning by 2041.

Plant restart backed by the state of Michigan

The company later announced plans to apply for federal funding that would allow it to restart the plant, with Michigan Governor Gretchen Whitmer among those who supported the move. Michigan's fiscal year 2024 budget, signed by Whitmer in mid-2023, includes USD 150 million in funding to restart the plant.

Responding to the loan guarantee announcement, Whitmer said that reopening Palisades would protect 600 well-paid, highly skilled jobs, as well as provide “clean and reliable energy” for 800,000 households.

“Once the Palisades nuclear power plant is back online, it will become the first successfully restarted nuclear power plant in American history, delivering a positive economic impact of $363 million to the region and helping Michigan lead the clean energy future,” she said.

Long-term goals and potential for SMRs

Holtec began the process of obtaining authorization from the U.S. Nuclear Regulatory Commission (NRC) in October 2023. The project aims not only to restart operations but also to modernize the plant so it can generate clean energy through 2051. The restart is expected to prevent around 4.47 million tonnes of CO2 emissions annually.

Jennifer Granholm, U.S. Secretary of Energy, highlighted the importance of nuclear power as a major source of carbon-free electricity. Holtec Palisades is the first project to be offered conditional financing under the Energy Infrastructure Reinvestment program, established as part of the Inflation Reduction Act.

Holtec also said it plans to site its first two small modular reactor units at the Palisades plant. Although these SMRs will not be financed under the loan guarantee, the DOE said the units “could potentially add another 800 MWe of installed capacity, use existing infrastructure and support the domestic development of new reactor technologies, which is key to tackling the climate crisis”.

Plant history and restart conditions

The Palisades nuclear power plant began commercial operation in 1971. Located on the shore of Lake Michigan, the plant was known for its safety and reliability throughout its operating history.

The decision to close the plant was driven by economic factors, as its operator, Entergy, had reached the end of its 15-year power sales agreement with Consumers Energy.

The plant's restart will not require additional construction work, but Holtec will have to meet certain technical, legal, environmental and financial conditions before the DOE formally proceeds with the restart process and financing under the agreed loan.