Michigan nuclear plant aims to be first ever to reopen in US

Holtec, a manufacturer of nuclear reactor equipment, has an unprecedented plan to restart the shuttered Palisades Nuclear Plant in Michigan. Thanks to a conditional loan guarantee from the U.S. Department of Energy’s Loan Programs Office, that plan is now $1.52 billion closer to reality.

If the loan is granted (subject to Holtec meeting closing conditions) and the 800-megawatt reactor located on Lake Michigan is repowered, it would be the first nuclear plant in the U.S. to reopen after being closed for decommissioning. Surprisingly, it would be just the second or third reactor to restart in the history of global civil nuclear power, according to Mycle Schneider, lead author of the World Nuclear Industry Status Report 2023, in an interview with Bulletin of the Atomic Scientists.

Nuclear energy supplies just under 20 percent of U.S. electricity, a share that has barely budged in recent decades as the country has struggled to build the few new reactors that have been proposed. The average age of the reactors in the country’s 93-unit fleet is 42 years old.

As the country pushes to decarbonize its power grid, nuclear advocates are urging the U.S. to reinvest in the energy source, despite its baggage around cost and timing overruns and environmental concerns. Repowering Palisades would represent serious progress for nuclear energy in the U.S., but it won’t be an easy path ahead.

Holtec purchased Palisades a month after it shut down with plans to mothball the site, but plans changed. Now the firm, which specializes in nuclear waste management and decommissioning (as opposed to rebuilding and operating nuclear plants), intends to revive the plant instead. Holtec plans to get the power plant restarted by the end of 2025, a breathtakingly aspirational target given nuclear’s history of missing construction and cost targets.

The Palisades plant was closed by utility Entergy in May 2022 due to financial issues after operating for more than a half-century. And while the plant had a strong operational performance record in recent years, it also has a sobering history of shutdowns due to failures of critical equipment, as well as broken fuel rods and fuel-spill incidents. The site was shut down for the final time a few days ahead of schedule due to concerns about the reliability of a key piece of equipment.

When it was operating at its peak, the plant provided more than 600 high-paying jobs, many unionized. If restarted, the plant could drive up to $363 million in regional economic impact, according to Michigan Governor Gretchen Whitmer, a Democrat. That’s why Whitmer and a bipartisan coalition of lawmakers back resurrecting the retired reactor. Local business owners and residents are ​“largely supportive” of the plan as well, according to local news site MLive. The state’s 2024 budget devotes $150 million to the project.

Still, the revival of the dormant Palisades faces its share of headwinds.

Like the nearly-shuttered Diablo Canyon plant in central California, Palisades will require extensive testing and repairs to compensate for deferred regulatory compliance and upkeep. Additionally, the Nuclear Regulatory Commission has never considered reauthorizing a license for a shuttered plant. While the regulators are familiar with the reactor design, the unfamiliar nature of a reactor restart muddies the water on timing and cost. Holtec will also have to seek out and finalize contracts for fuel and refueling services.

If Holtec successfully repowers Palisades, it will be able to garner federal incentives such as a production tax credit geared to help keep the current nuclear fleet competitive, as well as an investment tax credit intended to speed new-plant construction. Holtec has also applied to the U.S. Civil Nuclear Credit Program, which has now extended its eligibility to include recently closed plants.

These are heady days for the U.S. nuclear industry: The government and the DOE are solid supporters of commercial nuclear power, providing incentives to build advanced reactors, enrich fuel and keep existing plants open. Citizen sentiment about nuclear power is more positive than it’s been in years. And more than 20 nations, including the U.S., pledged to triple installed nuclear power by 2050 during last year’s COP28 climate conference.

Despite that, the path to adding more nuclear power to the U.S. grid is as murky as ever. The country’s most promising new nuclear project, NuScale’s planned deployment of a small modular reactor in Idaho, fell apart late last year, and there’s no obvious next-best contender in the pipeline.

If successful, the Palisades restart could provide the American nuclear renaissance with a much-needed win — even if that means rousing an old reactor from its nap rather than starting up a shiny new one.