Key Takeaways
Faced with rising electricity demand while regulating coal and natural gas plants out of existence, the Biden-Harris Administration and the state of Michigan are spending taxpayer money to restart a nuclear reactor decommissioned 2 years ago.
The politicians will spend nearly $2 billion to resurrect the Palisades nuclear plant.
Michigan currently relies upon coal and natural gas for over two-thirds of its electricity, but the Democrat-controlled legislature last year passed a bill to close them all by 2040.
The recommissioning reflects the fact that rising demand from AI and Biden-Harris policies need reliable power that wind and solar cannot provide due to their intermittency.
The federal government and Michigan are investing close to $2 billion to reactivate the Palisades nuclear reactor located on Lake Michigan’s shore. Once it resumes operation, Palisades will become the first nuclear plant to restart after being decommissioned. The World Nuclear Association, a London-based industry group, reports that no other reactor has undergone decommissioning and then been brought back online. The planned reopening of Palisades is set for October 2025, roughly 18 months after the restart process commenced. The plant’s owners are confident that it can run for at least another 25 years. With better planning, the decommissioning in 2022 during the Biden-Harris administration might have been avoided. Comprehensive studies on the energy grid, the true costs of wind and solar power, their reliability, and the full range of available “clean energy” options could have saved billions for taxpayers and consumers. However, due to the lack of such studies, taxpayers in Michigan and the U.S. will now bear the cost.
There are currently 22 nuclear reactors being decommissioned in the U.S., a process that can span several decades, according to the Nuclear Regulatory Commission (NRC). Some reactors, like Three Mile Island’s Unit No. 1, which was not damaged in the 1979 partial meltdown, might be viable for reopening, industry experts suggest. Recently, utilities have requested license extensions for 14 reactors. Nearly all 94 operating reactors in the U.S. have had their licenses extended to 60 years, with two extended to 80 years. In Iowa, NextEra Energy is considering reopening the Duane Arnold Energy Center, which closed in 2020 due to significant windstorm damage.
In Georgia, two new reactors at the Vogtle plant have recently gone online, partially funded by up to $12 billion in federal loan guarantees. However, these Vogtle units have faced years of delays and cost overruns, largely due to stringent NRC regulations. Earlier this year, Bill Gates launched a project for a next-generation nuclear plant in Wyoming.
Renewed interest in nuclear power is driven by rising electricity demands from AI data centers and the Biden-Harris administration’s push to electrify various sectors, including heating, cooking, and personal transportation. According to a Goldman Sachs report from April, data centers are expected to represent 8% of U.S. electricity demand by 2030, up from 3% in 2022. Additionally, substantial state and federal funding and tax incentives for nuclear energy in infrastructure and green power programs are contributing to this renewed interest. Some experts argue that restarting decommissioned nuclear plants is a quicker and more cost-effective way to increase reliable energy capacity, especially given that building new nuclear facilities can take over a decade and wind and solar power are intermittent and weather-dependent.
The Palisades Nuclear Plant
The Palisades plant, operational since 1971, harnessed heat from nuclear fission to convert water into steam, which drove a turbine generating up to 800 megawatts of electricity. Engineers are currently assessing the plant’s systems to ensure no corrosion or decay has occurred during its period of inactivity. In 2016, Entergy, the previous owner of Palisades, announced its closure due to high operational costs. It was one of twelve nuclear plants shut down between 2012 and 2021, primarily due to economic challenges posed by low-cost natural gas from the U.S. fracking boom and heavily subsidized wind and solar power. Nuclear plants are more expensive to operate due to higher labor, security, and regulatory costs compared to other power sources.
However, the financial landscape has shifted with the Biden-Harris administration’s introduction of loans and tax subsidies aimed at supporting existing nuclear plants, as part of the Inflation Reduction Act of 2022. This legislation, which passed with Democratic support and Vice President Harris’s tie-breaking Senate vote, promotes green energy. Utilities now face the dual challenge of meeting the Biden-Harris administration’s net-zero climate goals while expanding overall energy production. In Michigan, state legislation passed in 2023 mandates that all electricity come from carbon-free sources by 2040, replacing the coal and gas-fired plants that currently provide over two-thirds of the state’s electricity.
Holtec acquired Palisades in 2018 for a minimal fee, before federal and state incentives were introduced, with plans to use a $592 million federal trust fund designated for decommissioning. However, shortly after taking over in 2022, Holtec announced its intention to restart the plant. The company received $300 million from state lawmakers and up to $1.52 billion in federal loans for this effort. Holtec also owns other plants being decommissioned, such as Oyster Creek in New Jersey, Pilgrim Nuclear Power Station in Massachusetts, and Indian Point Energy Center in New York, none of which it plans to restart.
Following Palisades’ closure in 2022, workers removed 204 fuel rod assemblies and stored them in an underwater spent fuel pool to keep the radioactive material cool. Each assembly contains thimble-sized uranium oxide pellets, equivalent in energy to a ton of coal, with around 18 million pellets in total at Palisades. Additionally, the plant’s generator and turbine, which spun at 1,800 revolutions per minute to generate electricity, were shut down.
To restart the plant, Holtec is carefully reactivating the plant’s interconnected industrial systems. This involves replacing ball bearings in pumps and motors, inspecting and cleaning 8,219 steam-carrying tubes in the two 460-ton steam generators, and maintaining the concrete and steel pipes that channel 390,000 gallons per minute of Lake Michigan water into the cooling system. In July, workers successfully restarted the primary coolant pumps, flushing out radioactive particles and reducing exposure risk. Chemicals were also added to remove debris from the system.
This fall, Holtec plans to relocate spent fuel from the storage pool to 16 new concrete and steel casks located about a quarter-mile away. The fuel will be transported in special casks on a halftrack vehicle designed for moving large components, following a designated track to its new location. The site currently holds 49 casks containing 869 metric tons of spent nuclear fuel.
Next year, Holtec aims to move new fuel into the reactor vessel. This will involve replacing 45 metal seals around the control rods, installing an upgraded fire suppression system, and enhancing cybersecurity and other features with new computer systems. Although the existing analog systems are functional, they require modernization.
Additionally, Holtec has proposed building two 300-megawatt small modular reactors at the Palisades site, utilizing new technology that generates less radioactive waste. The company plans to start construction in 2026 and have the reactors operational by 2030. Discussions with the NRC are ongoing, but the company has yet to apply for a license, and the NRC has not yet made a decision on the proposal.
Nuclear Power in Japan vs. Germany
Japan’s nuclear industry is also getting a new renaissance since it shuttered all 54 of its nuclear reactors after the Fukushima accident in 2011. Since then, growing demand for power has persuaded the government to reopen 10 of its 33 operable reactors, with another 15 reactors awaiting approval, according to the World Nuclear Association.
Germany, by contrast, closed the last of its 17 nuclear reactors in 2023 as it turned negative to nuclear power after the Fukushima accident. It is now burning coal as backup to its wind and solar units and building new natural gas facilities. It is expected to miss its mandated climate reduction targets in 2030.
Conclusion
After being decommissioned, the Palisades nuclear reactor is getting another chance to generate power due to financial support from taxpayers via the Biden-Harris administration and the state of Michigan. Increasing electricity demand from AI data centers and the Biden-Harris climate and electrification goals has made politicians realize wind and solar power cannot do the job of providing reliable power 24/7 and replace existing coal and gas generators as well as meet new demand. Palisades is expected to be back in operation next year. It is unclear how many other decommissioned nuclear units will be resurrected. Careful planning and an understanding of the limitations of wind and solar power could have avoided the extra costs to bring a unit undergoing decommissioning back to operation.
