In March of 2024, the Biden Administration announced a loan of $1.5 billion towards the restart of the Holtech-owned Palisades nuclear power plant in Michigan. If the plan goes through and the Palisades plant is able to be restarted, this will mark the first time that the US has recommissioned a previously shut-down nuclear plant. The loan and restart of the reactor is projected to create economic gain in the region and promote the US’ goal of decarbonization. However, like many projects in the nuclear energy industry, the plan is not without its opponents.
A History of Palisades
Initially licensed for operation at full power in 1973, the Palisades nuclear plant in Detroit features a singular 800 MW reactor. The plant was originally scheduled for decommissioning in 2011, however an extension of this deadline was successfully filed with the NRC, pushing the decommissioning date back to 2031. The plant was shut down before this date though, mainly due to financial reasons under its previous ownership by Entergy. In 2022, the plant was sold to Holtech, who sought to restore the plant to operation, seeking – and now receiving – government aid for this process.
The Benefits
The main benefit that it sought to be realized by this endeavor is a stronger supply of carbon-neutral energy. Nuclear energy emits zero carbon emissions during operation, and this plays well into the Biden administration’s goal of a net-zero grid by 2050. The reoperation of the Palisades plant is expected to prevent the emission of 4.47 million tons of carbon dioxide per year by replacing fossil fuel energy sources (“LPO”). Investment in this project helps to renew this powerful source of energy without all the frustrations of building and licensing a new nuclear plant; as shown with Georgia’s Vogtle plant earlier this year, investments into new large power reactors typically take decades to see fruition.
The project also boasts economic benefits for the region. Michigan governor Gretchen Witmer projects a regional economic impact of approximately $363 million by boosting jobs and infrastructure (Penn). Additionally, the project is aligned with the Biden administration’s Justice40 initiative to provide federal investment benefits to over-polluted, marginalized, and underinvested communities. Located in a community in which residents pay higher electricity costs than 97% of the rest of the American population, a reopening of Palisades will help to not only lower these costs but also provide additional jobs for residents (“LPO”).
The Costs
On the other hand, the proposed plan to restart Palisades does run into some issues, mainly economic ones. As mentioned with the Vogtle plant, large-scale nuclear projects have a tendency to run over- budget and past deadlines, meaning that the government and other stakeholders could be spending billions on a project that won’t provide a return on investment for the next few years. Additionally, concern is raised over the fact that the original reason for shutdown was the low profit of operation. Of course, technology and management has improved, but what’s to say definitively that this plant will become profitable in the long run?
Along these lines, critics also point out the high cost of nuclear compared to renewables like wind and solar. Estimates put nuclear energy between 2.3 and 7.4 times as expensive as a wind and solar grid (Rapoport). If this is the case, then the proposed benefits to electricity costs in the region might not be realized, creating further strain on nearby communities.
What Does it Mean?
For now, the investments and plan to restart the Palisades plant are proceeding. Since both proponents and opponents of the restart cite the projected economics of operation, only time will tell who is right. Whatever the outcome of the Palisades restart, it will set a precedent for many of the shut-down reactors around the country. If successful, thousands of megawatts of clean energy could be used once again for the American people. But if budgets and timeline overruns once again become a problem, this process could be a large nail in the coffin for mega-scale nuclear energy, shifting the industry towards less capital-intensive projects like micro- and small modular reactors.
Sources:
Penn, Ivan. “Palisades Nuclear Plant in Michigan Plans to Reopen With $1.5 Billion Loan.” The New York Times, 27 Mar. 2024, https://www.nytimes.com.
“LPO Announces Conditional Commitment to Holtec Palisades to Finance the Restoration and Resumption of Service of 800-MW Nuclear Generating Station.” Department of Energy, 27 Mar. 2024, https://www.energy.gov.
Rapoport, Rodger. “The Government is Spending Billions to Restart Michigan’s Palisades Reactor. Why?” Detroit Free Press, 16 Apr. 2024, https://www.freep.com.