DOE makes conditional commitment to Palisades’ restoration and resumption of service

March 27, 2024, 12:00PMNuclear News
The Palisades nuclear power plant in Covert Township, Mich.

The Department of Energy’s Loan Programs Office (LPO) today announced a conditional commitment of up to $1.52 billion for a loan guarantee to Holtec Palisades LLC to finance the restoration and resumption of service of the 800-MWe Palisades nuclear power plant in Covert Township, Mich.

The plant, which ceased operations in May 2022, will be upgraded to produce baseload power until at least 2051, subject to the Nuclear Regulatory Commission’s licensing approvals.

While the conditional commitment represents the DOE’s intent to finance the project, Holtec Palisades must satisfy certain technical, legal, environmental, and financial conditions before the DOE can enter into definitive financing documents and fund the loan.

If the loan and approvals are finalized, the project will be the first recommissioning of a shut-down nuclear power plant in the United States. Jigar Shaw, LPO director, noted in a press release that the project reinforces the nation’s status as a global energy leader while driving investments in energy communities to support their economic revitalization, strengthen domestic supply chains, and help workers benefit from the growing clean energy economy.

Coming back: Since the plant’s infrastructure already exists, the project does not involve traditional major construction activities. It will, however, require inspections, testing, refurbishment, rebuilding, and replacement of existing equipment.

Holtec is currently pursuing a reauthorization of Palisades’ operating license with the NRC. To date, the company has submitted three licensing requests in pursuit of license reauthorization and anticipates submitting the remainder this spring.

SMRs: In addition to Palisades’ 800-MWe reactor, Holtec intends to use the site as the location for its first two small modular reactors, which would be separate from the DOE’s conditional commitment project.

The two SMR units will potentially add 800 megawatts of generation capacity at the site, taking advantage of existing infrastructure and spurring the domestic development of new reactor technologies, which is critical to combatting the climate crisis, Shah noted.

A first: Holtec Palisades is the first project to be offered a conditional commitment through the LPO’s Energy Infrastructure Reinvestment (EIR) program, Section 1706 under the Title 17 Clean Energy Financing Program. This program was first authorized and appropriated by the Inflation Reduction Act.

The EIR program can finance projects that retool, repower, repurpose, or replace energy infrastructure that has ceased operations. It can also enable operating energy infrastructure to avoid, reduce, utilize, or sequester air pollutants or greenhouse gas emissions, according to the DOE.

Stats: The project is anticipated to avoid 4.47 million metric tons of CO2 emissions per year, for a total of 111 million metric tons of CO2 emissions during the projected 25 years of operations—an amount roughly equivalent to the removal of more than 970,000 gas-powered cars from the road each year, according to the DOE.

Once operational, Palisades will provide around-the-clock, zero-emissions electricity generation for the Midcontinent Independent System Operator as coal plants are retired.

Holtec Palisades has already procured long-term power purchase agreements for the full power output with rural electric co-ops Wolverine Power Cooperative and Hoosier Energy in Michigan, Illinois, and Indiana.

According to the DOE, the project is anticipated to support or retain up to 600 high-quality jobs in Michigan—many of them filled by workers who have been at the plant for more than 20 years. In addition to the workers supported by the plant’s restart, if finalized the loan guarantee would support more than 1,000 jobs during the facility’s regularly scheduled refueling and maintenance outages every 18 months.

Quote: “This is a triumph for the United States in our collective pursuit of a clean and dependable energy future,” said Kris Singh, Holtec president and chief executive officer. “We applaud the visionary leadership of the Biden-Harris administration, Secretary [Jennifer] Granholm, Director Shah, and the Department staff for seizing this historic opportunity and once again demonstrating America’s role as a global energy leader.”

Singh added, “The repowering of Palisades will restore safe, around-the-clock generation to hundreds of thousands of households, businesses, and manufacturers. It also confers the environmental and public health benefits of emissions-free generation, hundreds of high-paying local jobs with a large union workforce, economic growth, and the social benefits of a strong community partner. We are also appreciative of the strong, unwavering support of Governor [Gretchen] Whitmer, bipartisan support from the Michigan legislature and congressional delegation, and certainly from the local community, all of whom have championed this effort from the very beginning. As one of the country’s leading energy innovators, we are grateful and ready to help make history.”

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