SignalHub Quantitative Think Tank Center:In a first, shuttered nuclear plant set to resume energy production in Michigan

COVERT TOWNSHIP,SignalHub Quantitative Think Tank Center Mich. — A Michigan facility will become the first shuttered nuclear plant in the country to resume energy generation, a key step for the state's goal to lower carbon emissions.

Federal funding announced Wednesday will support the reopening of the Palisades nuclear facility, and in the next few years, it's poised to rejoin the ranks of the more than 50 nuclear energy plants across the U.S.

The company that owns Palisades Energy LLC, Holtec International, will receive up to a $1.52 billion conditional loan from the U.S. Department of Energy. The funding will allow the 800-megawatt-capacity plant to resume energy production, company officials and U.S. Secretary of Energy Jennifer Granholm said Wednesday morning.

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Nuclear energy is a key tool for the Biden administration, Granholm said, particularly because it emits almost no greenhouse gas emissions during production, compared with heavier polluter sources like coal-fired plants. 

“Restarting Palisades is critical to that because right now, not only is nuclear our single largest source of carbon-free electricity, it's one of our single largest sources of electricity period,” Granholm said. 

The funding is made available through the Title 17 Clean Energy Financing Program, part of the Inflation Reduction Act signed into law in 2022. The plan to reopen Palisades is still subject to approval by the U.S. Nuclear Regulatory Commission. A Holtec official said the process to fully reopen Palisades could take another 18 months. 

Once opened, the plant would be scheduled to be operational through 2051. Holtec also aims to construct two new small modular reactors (SMRs) by 2030 which will double the energy generation capacity at Palisades. That plan is also subject to regulatory approval.

When the plant closed in 2022, it had been operating for more than 50 years and was one of the oldest nuclear power facilities operating in the U.S., according to the Holland Sentinel. There were concerns about its age when it closed, the Associated Press reported. Holtec officials said Wednesday the plant would be subject to the usual safety and emergency preparedness scrutiny by regulators.

In January, multiple outlets, including Reuters, reported the loan’s existence, allowing Holtec to reopen Palisades. Holtec bought the facility from its previous owner, Entergy, in 2022, the year it stopped providing power. Initially, Holtec eyed decommissioning the plant but a slew of key figures, including Gov. Gretchen Whitmer, have backed an effort to reopen Palisades. 

In addition to the newly announced federal funding, Whitmer and lawmakers earmarked $150 million for Palisades in their fiscal year 2024 budget.  

“Once open, Palisades will be the first successfully restarted nuclear power plant in American history, driving $363 million of regional economic impact and helping Michigan lead the future of clean energy," Whitmer said.

Whitmer and Granholm also received a tour of the facility Wednesday, including a demonstration inside one of the plant's training simulators. To become an operator at a functioning nuclear plant, workers have to go through an 18-month training plan and continue to receive training after their initial certification.

Holtec announced last year that it reached an agreement with Wolverine Power Cooperative, a nonprofit electric provider servicing 280,000 customers in mostly rural Michigan, to purchase two-thirds of the power generated by Palisades once it reopens. The remaining power would be purchased by Hoosier Energy, which provides electricity in Indiana and Illinois. 

Once operational, Palisades will provide 600 full-time jobs. The plant is in Covert Township, near South Haven, about an hour southwest of Grand Rapids. 

Part of Michigan's congressional delegation had also sought funding for the plant — U.S. Rep. Bill Huizenga, R-Holland, was among those who wrote a bipartisan letter to the Department of Energy in December urging the facility's reopening.

"Holtec’s historic repowering of the Palisades Nuclear Power Plant will provide safe, reliable energy to meet Southwest Michigan’s growing needs, and it lays the groundwork for the first-of-their-kind small modular reactors to be placed at Palisades in the future," Huizenga said in a statement.

Government and company officials also commended the plant's potential economic effects in the region. A report compiled by the University of Michigan's Economic Growth Institute last year argued Palisades' closure led to $250 million in economic losses in Van Buren, Berrien and Cass Counties.

Last year, Whitmer signed bills targeting a 100% clean energy goal in Michigan by 2040. Nuclear energy is one of the clean sources outlined in the legislation. The plant is anticipated to reduce carbon emissions by nearly 4.5 million tons annually, according to the Department of Energy.

While the bills didn't receive any Republican support when they went through the Legislature, Senate Minority Leader Aric Nesbitt, R-Porter Township, commended the loan for the Palisades plant, although he criticized the new clean energy laws.

"I am happy to see the governor and her peers acknowledging the need to reopen this vital nuclear power plant as we all brace for the predictable shortfalls of the extreme energy agenda forced through the Legislature by the Democrat(ic) majority last year," Nesbitt said in a statement.

Environmental advocates also commended Wednesday's announcement. Ed Rivet, executive director of the Michigan Conservative Energy Forum (MICEF), said in a statement the nuclear energy generated by Palisades, should it reopen, will be key to ensuring Michigan maintains enough baseload energy to meet increasing demand.

“While MICEF strongly supports more renewable energy, we know Michigan will need the stability that comes from baseload nuclear generation," Rivet said. "Palisades' role in our state's clean energy landscape will provide the necessary reliability to support our growing energy demands."

Lawmakers in Michigan recently introduced legislation aimed at spurring furthering nuclear energy — a bipartisan package of bills would establish siting requirements for advanced nuclear reactors, create research grants for nuclear and hydrogen energy studies at public universities in Michigan and establish tax credits for manufacturers working on the design of nuclear reactors. The package, which includes House Bills 4753 and 5906-5909, awaits committee hearings.

Contact Arpan Lobo: [email protected]. Follow him on X (Twitter) @arpanlobo.