The United States issued a $1.5 billion loan to reopen a nuclear power plant in a historical first for the country.
The Biden administration will grant a $1.5 billion loan to the state of Michigan to reopen a dismissed nuclear power plant. This is the first time in US history that something similar has happened, with nuclear power falling out of favor in fear of accidents.
The Palisades power plant in Michigan generated energy between 1971 and 2022 with a generational capacity of 800 megawatts. Michigan Governor Gretchen Whitmer said the plant drives up to $363 million of regional economic impact.
The plant was owned first by CMS Energy and later by the Louisiana-based Entergy. In 2022, following its shutting down, the plant was purchased by Holtec International with plans of dismantling it.
However, the Federal Government tasked Holtec to reopen the plant under the new Inflation Reduction Act. The company received $1.5 billion from the federal government, as well as $150 million from Michigan’s legislature.
Palisades should be online again in late 2025 and will function until 2051. Holtec announced it would take several months to finalize the financial requirements of the deal, pointing out that “it is a loan we have to pay back”.
“The repowering of Palisades will restore safe, around-the-clock generation to hundreds of thousands of households, businesses, and manufacturers,” said Holtec CEO and President Kris Singh.
This is the second significant US government loan in weeks after the $20 billion grant to Intel to build semiconductor plants inside the national territory.
Nuclear back on the agenda
At the end of the XX century, nuclear power was increasingly unpopular among Western countries’ populations. In the United States especially, this energy source fell out of favor following the Three Mile and Chernobyl incidents.
In the last decade, however, nuclear came back into fashion. Its virtually zero emissions make it a perfectly sustainable energy source, without the volatility solar and wind power entail.
In 2017, nuclear power amounted to 9% of the US’s energy production. According to the US Energy Information Administration, the percentage rose to 18% in 2022.
Last week, the Biden administration again called for increased sustainability. The United States plans to reach a net-zero emission grid by 2035, a tall order considering fossil fuels amounting to 60% of current energy production.
“There is more enthusiasm toward nuclear power — in Congress, in the industry, and also internationally,” said Najmedin Meshkati, an engineering professor at the University of Southern California.
China, the world’s largest net emitter, is also significantly expanding its nuclear potential. The country currently has 55 active reactors, with 24 under construction and 41 firmly planned. When completed, nuclear power will amount to almost 15% of China’s energy production.
