A decommissioned nuclear power plant in Michigan will be restarted.
Driven by growing demand for carbon-free energy, the Palisades Nuclear Power Plant will be the first nuclear power plant in the United States to be reopened after being closed.
The Palisades Generating Station was built in the late 1960s and began operating in 1973. It was purchased in 2006 by Louisiana-based utility Entergy Corporation (ETR), which operated it until 2022.
The nuclear plant had an extended license to operate until 2031, but Entergy chose to close the plant due to the high costs of operating a nuclear power plant.
The nuclear plant was sold to nuclear equipment manufacturer Holtec International, which took responsibility for decommissioning the plant.
Holtec has announced plans to reopen the facility in 2022, something that would be unprecedented in the United States.
This year, the U.S. Department of Energy committed $1.52 billion in loans to fund the rehabilitation and restart of Holtec-owned nuclear plants.
The company is currently working to restore the facility to modern standards, the WSJ reported, and plans to have the plant up and running again by October 2025.
Nuclear power generation is being revamped
The renewed interest in nuclear energy comes as demand for electricity grows.
In a recent interview with Elon Musk, former President Donald Trump said he was shocked by the amount of electricity that powers artificial intelligence systems.
According to Rene Haas, CEO of Arm Holdings PLC (ADR ARM), the AI revolution will double data center power demand, leading to data centers consuming 25% of all electricity in the United States by 2030.
According to Goldman Sachs, data centers will use 8% of US electricity by 2030, up from 3% in 2022.
Former Microsoft CEO Bill Gates recently said not to “get too carried away” with panic over energy-hungry AI systems, saying clean energy investments by big tech companies could help drive the transition to green energy production.
Related article: Nvidia's AI dominance is under threat from Asian startups betting on energy-efficient, cost-effective silicon — 'inference' and 'training' chips emerge as key focus
The Biden administration has been betting big on nuclear power capabilities to free the country from reliance on fossil fuels for energy production.
According to the Energy Information Administration, 60% of electricity production in the United States comes from fossil fuels.
The Biden administration has set a goal of building a zero-emissions electric grid by 2035 and included several tax credits and other incentives for nuclear power in the Inflation Reduction Act of 2022.
The government recently planned to invest $2.7 billion in U.S.-made uranium to reduce reliance on Russian imports.
Interest in nuclear power has waned as fracking has created a vast supply of cheap natural gas, lowering the cost of burning it to generate electricity.
Isolated accidents at nuclear power plants have contributed to growing public rejection of nuclear technology, including the Three Mile Island meltdown in 1979, the Chernobyl disaster in Ukraine in 1986, and the Fukushima nuclear accident in Japan in 2011.
High construction costs and ongoing concerns about storing nuclear waste have hindered the development of new nuclear energy projects in recent decades.
New projects coming online
The nuclear sector may be getting a new boost: A Pew Research Center survey conducted in May found that support for nuclear power in the United States has been steadily increasing over the past decade.
Currently, 56% of American adults support the development of nuclear energy projects.
The United States has 94 operating nuclear reactors, down from a peak of 111 in the late 1990s. These are located in 54 nuclear power plants in 28 states.
The two newest reactors will begin commercial operation in 2023 and 2024 at the Alvin W. Vogtle Generating Station in Georgia. They will be operated by Southern Nuclear, a subsidiary of Southern Corporation.
The twin reactors cost $35 billion to build, according to E&E News.
Some companies working on advanced reactor designs are seeking licenses from the Nuclear Regulatory Commission to build new reactors.
Reuters reported that NuScale Power (SMR), a company developing small modular reactors, has scrapped plans to build a six-reactor, 462-megawatt power plant in Utah in 2023 after several municipalities backed out due to high construction costs.
The company plans to deploy 24 small modular reactors at nuclear power plants in Ohio and Pennsylvania, according to E&E News.
Other companies are developing new projects that still need to be proven before they can become mainstream technologies.
Kairos Power is developing a test reactor in Oak Ridge, Tennessee, to test its fluoride-cooled high-temperature reactor technology. The company has received $303 million in funding from the Department of Energy to complete the project.
Earlier this month, TerraPower, a company founded by Bill Gates, began construction in Wyoming on the first advanced nuclear reactor, which, like Kairos, will not use water for cooling.
Notable ETFs
The VanEck Uranium Nuclear Energy ETF NLR, which tracks the nuclear power sector, rose 0.21% on Tuesday and has risen 2.4% over the past five trading days. The Global X Uranium ETF URA, which tracks the global uranium market, has risen 4.3% over the past five trading days.
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Palisades Nuclear Generating Station photo provided by Nuclear Regulatory Commission.
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