The United States Department of Energy (DOE) is offering a loan of up to USD$1.52 billion to Holtec Palisades to finance the servicing and restoration of an 800-megawatt electric nuclear power station in Covert Township, Michigan.
Announced on Wednesday, this came about as part of President Biden’s Investing in America agenda, and aims to bring the Palisades Nuclear Plant back online after it ceased operations in May 2022. It also aims to upgrade it to produce clean power until 2051, which will be subject to licensing approvals from the U.S. Nuclear Regulatory Commission (NRC).
If finalized, Holtec Palisades will reinforce America’s status as a global energy leader while also driving critical investments in energy communities to create good-paying job opportunities, support economic revitalization, and strengthen domestic supply chains.
The company also plans to construct its first two small modular reactor (SMR) units at the site, which will not be part of the project eligible for the loan. NuScale Power‘s (NYSE: SMR) SMR technology has faced cost and subscription issues, leading to the shelving of one of its SMR projects. NuScale was the only one to have received design certification from the U.S. nuclear power regulator last year.
Michigan Governor Gretchen Whitmer said that loan will safeguard 600 well-paying, high-skill jobs and ensure clean, reliable power for 800,000 homes. Once operational, Palisades will mark a historic milestone as the first successfully restarted nuclear power plant in the United States. The initiative is expected to generate a regional economic impact of $363 million, positioning Michigan at the forefront of clean energy innovation.
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Michigan project will offset 111 million tons of CO2 over 25 years
The project anticipates avoiding 4.47 million tons of CO2 emissions per year, which is roughly 111 million tons over the projected 25 years of operations. This amount is roughly equivalent to the annual emissions of removing more than 970,000 gasoline-powered cars from the road.
Once operational, the Palisades Nuclear Plant will provide around-the-clock, zero-emissions electricity generation, making it a strong addition to Midcontinent Independent System Operator’s (MISO) resource mix as coal plants are retired.
Holtec Palisades has already secured signed long-term Power Purchase Agreements (PPAs) for the full power output with rural electric co-ops Wolverine Power Cooperative and Hoosier Energy in Michigan, Illinois, and Indiana.
This development comes at a time when the United States is approaching a crisis in power generation.
The United States has recently encountered a series of problems with uranium production for its rapidly aging fleet of reactors. Currently, it has terminated a trade relationship with its Russian uranium supplier, putting itself in a difficult position in terms of fulfilling its own demand. To address this challenge, the U.S. may need to increase its reliance on Canada’s Athabasca Basin and other suppliers.
This could bode well for companies like Cameco Corporation (NYSE: CCO) (TSX: CCJ), which is already straining to meet the increased demand. Also, companies like Denison Mines (TSX: DML) and ATHA Energy Corp. (TSXV: SASK) (FRA: X5U) (OTCQB: SASKF) could benefit.
ATHA Energy Corp. is a sponsor of Mugglehead news coverage
