The expected became official as the U.S. Department of Energy (DOE) announced it would offer a $1.5 billion loan for Holtec International to finance the restart of the Palisades Nuclear Plant.

The announcement came from Former Michigan Governor and current Secretary of Energy Jennifer Granholm, who toured Palisades Wednesday morning.

While the conditional commitment from DOE’s Loan Programs Office (LPO) demonstrates intent to finance the restart, Holtec must satisfy certain technical, legal, environmental and financial conditions before the Department enters into definitive financing, DOE said.

Still, the momentum points to Palisades becoming the first shut-down nuclear power plant to be recommissioned in the U.S. The 800 MW facility in Covert Township would be upgraded to produce baseload clean power until at least 2051, subject to U.S. Nuclear Regulatory Commission (NRC) licensing approvals. 

“This is a triumph for the United States in our collective pursuit of a clean and dependable energy future,” said Dr. Kris Singh, Holtec President and CEO.

Holtec acquired the plant in June 2022 just after it was shutdown. In early 2023, the company for federal loan funding to repower Palisades. That was followed by a rigorous review of the loan application by the DOE and third-party advisors to consider technical, market and regulatory aspects, among others. Holtec officials said repowering Palisades was always going to be contingent on receiving federal funding.

Since the plant’s infrastructure already exists, the repowering project will not involve traditional major construction activities, but it will require inspections, testing, refurbishment, rebuilding and replacement of existing equipment, DOE said.

Holtec has also applied to reauthorize the Palisades operating license with the NRC. The company has submitted three licensing requests in pursuit of license reauthorization and anticipates submitting the remainder in spring 2024.

The Biden Administration is supportive of nuclear energy, believing it will play a critical role in reaching U.S. goals of a 100% clean electric grid by 2035 and a net-zero emissions economy by 2050. Since 2022, nearly two dozen states have considered legislation or enacted policies supportive of nuclear.

The Palisades nuclear plant in Michigan. Photo from Holtec International.

Support has been especially vocal for re-opening Palisades. In May 2023 a bipartisan group of Michigan lawmakers that make up a newly-formed nuclear energy caucus wrote a letter to Gov. Gretchen Whitmer expressing “full support” for the reopening of the plant. Whitmer herself has supported reopening Palisades as more solar and wind power infrastructure is built out.

Palisades is the first project to be offered a conditional commitment through the Energy Infrastructure Reinvestment (EIR) program from the Inflation Reduction Act (IRA). EIR can finance projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations or enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or greenhouse gas emissions.

Holtec has already signed long-term Power Purchase Agreements (PPAs) for the full power output of Palisades with rural electric co-ops Wolverine Power Cooperative and Hoosier Energy in Michigan, Illinois and Indiana.

In addition to the main 800 MW reactor, Holtec intends to use the Palisades site as the location for its first two small modular reactor units, which would potentially add an additional 800 MW of generation capacity at the site.

Palisades began commercial operation in 1971.

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