The Biden administration announced on Wednesday that it had agreed to provide a $1.52 billion loan guarantee to help a company restart a nuclear power plant in Michigan — the latest step in the government’s effort to revive the nation’s reactors.
The loan guarantee from the Energy Department will allow Holtec International to revive the Palisades nuclear plant in Covert Township, Mich., on the shores of Lake Michigan and about 40 miles west of Kalamazoo, and keep it going until at least 2051. The loan guarantee is conditional on the facility receiving regulatory approvals and fulfilling other requirements. The plant ceased operations in May 2022.
Nuclear power plants produce electricity without emitting the greenhouse gas emissions that are warming the planet, a feature that has made them popular with lawmakers and energy executives. But many of the country’s nuclear reactors, including the Palisades plant, are at or near the end of their lives and need major upgrades. And few U.S. companies have built new nuclear plants in recent decades because doing so is incredibly expensive and time consuming. As a result, lawmakers in both parties have backed incentives and subsidies for nuclear energy.
Holtec bought the Palisades plant in 2022 in order to close the facility but later campaigned to reopen the plant with the backing of the Michigan governor, Gretchen Whitmer, a Democrat.
“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,” Ms. Whitmer said in a statement.
Federal loan guarantees and grants are expected to help extend the life of other plants and spur the development of new technologies to help ensure there is sufficient power to electrify home heaters, cars and industry.
California in recent years reversed its decision to close the Diablo Canyon Power Plant on the Pacific Coast because lawmakers are concerned that the state will not have enough sources of electricity to avoid rolling blackouts on hot summer afternoons. The Department of Energy awarded $1.1 billion to Pacific Gas & Electric to continue the plant’s operations.
“Nuclear power is our single largest source of carbon-free electricity, directly supporting 100,000 jobs across the country and hundreds of thousands more indirectly,” Jennifer M. Granholm, Mr. Biden’s energy secretary, said in a statement on Wednesday, announcing the loan guarantee for the Palisades plant.
The United States has the largest nuclear energy operation in the world, with almost 100 units across the country, including two new ones at the Alvin W. Vogtle Generating Plant in Georgia, which took more than a decade to build and cost a staggering $35 billion.
Because of the challenges of building large plants like the two Vogtle units — something experts have said was unlikely in the United States in the near future — the Biden administration also has pushed for smaller reactors that could be built more quickly and at lower cost.
Those units, often referred to as small modular reactors, could be built in stages rather than all at once. But no small modular reactors have received full approval and licensing from the Nuclear Regulatory Commission. Holtec wants to use the site of the Palisades nuclear plant to build two small modular reactors, though the cost of those would not be covered by the loan guarantee announced on Wednesday.
Until the small reactors become a reality, a greater focus has turned toward extending the life of nuclear plants already in operation and reviving older units.