Shuttered nuclear plant in Iowa gets $1.9B federal loan to restart

A third shuttered U.S. nuclear power plant is set to attempt a comeback with hefty support from the federal government.

On Tuesday, the U.S. Department of Energy said it closed a loan of up to $1.9 billion to NextEra Energy to help finance the restart of the Duane Arnold Energy Center in Iowa, which shut down six years ago. The company aims to begin producing electricity from the 615-megawatt power plant by early 2029.

The loan was finalized by the department’s renamed Office of Energy Dominance Financing, known as the Loan Programs Office under past administrations. The office previously closed a $1 billion loan to restart Constellation Energy’s Crane nuclear plant in Pennsylvania and a $1.52 billion loan to revive Holtec International’s Palisades plant in Michigan.

All three of these decades-old nuclear plants shut down in recent years owing to the high costs of repairing and relicensing the facilities. Competition from natural gas and increasingly low-cost renewable energy also soured operators and utilities on atomic power. 

But with electricity demand surging across the U.S., due in large part to the data center boom, power plant owners are looking to give their mothballed facilities a second chance — something that’s never been done before in the U.S.

Holtec’s Palisades plant is poised to become America’s first nuclear restart as early as this year. The firm has hit several snags along the way on the first-of-a-kind project, causing it to miss its original target of early 2026. But in July, it reached a ​“watershed moment” by completing all major renovations for its reconstruction of the plant’s single 800-MW reactor. Last week, Holtec said it achieved another historic milestone: beginning the process of loading nuclear fuel into the reactor vessel. It faces a contractual deadline to complete the restart by March 2027. 

If Holtec is successful in getting Palisades back online, it could help pave the path for reviving the country’s other shuttered reactors.

NextEra Energy, for its part, is still working to secure licensing approvals from the U.S. Nuclear Regulatory Commission to return Iowa’s only nuclear plant to service. Last fall, the company signed a 25-year agreement with Google to supply electricity from Duane Arnold, which will help power the tech giant’s growing cloud-computing and AI infrastructure in the state.

“By bringing new generation online to serve new demand, we can strengthen the grid, create hundreds of good-paying jobs and help ensure Iowa families and businesses are not asked to bear the costs of growth,” John Ketchum, president and CEO of Florida-based NextEra Energy, said in a Tuesday news release.

While federal loans for nuclear restarts began under the Biden administration, the Trump administration has leaned heavily into supporting nuclear, even as it cancels funding and blocks development of other clean energy sources. In June, the Office of Energy Dominance Financing announced a $17.5 billion loan initiative to help energy companies buy nuclear equipment and build 10 new large-scale reactors in the next few years.

The moves come amid growing bipartisan support in the U.S. for nuclear power, which can provide carbon-free electricity around the clock. Several Democratic-led states with moratoriums on nuclear power have in recent months walked back their restrictions as they seek low-emission sources of electricity that can supplement solar and wind and reduce strain on the grid. 

The Duane Arnold reboot is expected to supply enough power for nearly 500,000 homes and create nearly 1,500 jobs during construction, while supporting over 400 permanent positions during operations.

“New nuclear development and the restart of Duane Arnold will meet our growing energy demand while also providing hundreds of good-paying jobs throughout the state,” Iowa’s Republican Gov. Kim Reynolds said on Tuesday.