U.S. Department of Energy Conditionally Commits Up to $1.5 Billion to Finance Nuclear Plant in Michigan
Holtec Palisades is the first project to receive a conditional funding commitment from the U.S. government through the Inflation Reduction Act's Energy Infrastructure Reinvestment ("EIR") program.
The Palisades Nuclear Generating Station in Covert Township, Michigan, was built more than 50 years ago and approved to operate at full power in 1973. Scheduled for decommissioning by 2031, the plant was closed in May 2022 and sold to Holtec International one month later. The plant has been dormant since then.
The U.S. government's funding commitment will be used to restore the Palisades site and upgrade the 800-MW main electric nuclear generating station to produce clean power until at least 2051. If successful, and subject to Nuclear Regulatory Commission ("NRC") licensing approvals, Palisades would be the first recommissioning of a dormant nuclear plant in the United States. Holtec also plans to use the Palisades site as the location for two newly constructed small modular reactors ("SMRs"), although the government's conditional commitment will not be used to finance the SMRs. SMRs are a fraction of the size of conventional nuclear reactors and are prefabricated off-site to save costs and increase efficiencies. The two Palisades SMRs could add an additional 800 MW of generation capacity to the site.
The EIR program was created in part to finance the repurposing or replacement of out-of-service energy infrastructure throughout the United States. In addition to retooling, repowering, and replacing infrastructure, financing may also be provided to remediate environmental damage associated with energy infrastructure. To date, the Department of Energy has attracted hundreds of applications for projects across the country totaling more than $261 billion in requested loans and loan guarantees.
