US reviving shuttered nuclear plants to meet growing demand

Washington: The United States is making an unprecedented attempt to revive three shuttered nuclear plants to meet rising energy demand, including from large-scale data centres.

No commercial nuclear reactor is known to have resumed generating electricity after beginning the decommissioning process that takes one out of service, though some reactors have restarted after long outages.

The Department of Energy is lending as much as USD 4.4 billion to restart the Palisades Power Plant in Michigan, the Crane Clean Energy Centre on Pennsylvania’s Three Mile Island and the Duane Arnold Energy Centre in Iowa. Together, they would restore 2.25 gigawatts of electricity, enough to power roughly 2 million homes and businesses. All three plants closed before their licences expired, largely because the electricity they produced was considered too expensive.

Not anymore. Two of the plants have contracts with Big Tech companies that will pay a premium for large amounts of carbon-free energy for data centres. President Donald Trump’s administration is pushing hard to deploy nuclear power for artificial intelligence and manufacturing. It is also lending billions of dollars for upgrades to produce more electricity from currently operating nuclear plants.

Restarting a reactor is a fairly quick way to get a lot of electricity, and it is cheaper than building a new, large reactor, said nuclear engineering expert Todd Allen.

“There’s a demand in the country for more power,” he said. “You have these assets that were previously hooked up. They were previously operable, and you can relatively quickly get them generating electricity again, compared to your other possibilities. For anyone who wants zero carbon, nuclear provides that. For the Trump administration, which really wants nuclear, this fits that story also.”

Restarting a reactor is like restoring a car

Allen compared restarting a decommissioned nuclear plant to restarting a car that has sat idle for a few years. The driver still needs a valid licence, and all the parts need to work correctly.

“That’s what they’re trying to do with these nuclear plants, but it’s a much bigger, complicated system,” said Allen, associate dean for research at the University of Michigan’s College of Engineering.

With a nuclear plant, he added, the owner has to bring nuclear workers back and ensure their training is current, make sure everything is working and maintenance is up to date, secure enough fuel and ask regulators to restore the operating licence.

Allen said it is a lot to track, but relatively straightforward.

Expert warns restarts are risky

Edwin Lyman of the Union of Concerned Scientists (UCS) said the taxpayer money being used should go toward addressing safety risks. Most US plants were built between 1970 and 1990 and designed to withstand the natural disasters of that era, said Lyman, the group’s director of nuclear power safety. But climate change is making extreme weather events more frequent and severe.

“It’s possible, if they set the right level of safety and spend the necessary funds to meet that, they could restore these plants to operable condition,” he said. “That’s not happening at this point.”

Iowa’s only nuclear facility, Duane Arnold, began operating in 1975. It was scheduled to close permanently in October 2020. Replacing it with cheaper energy sources, including wind, was projected to save Iowa customers USD 300 million in energy costs. The plant shut down early, in August 2020, when it was damaged during a powerful storm known as a derecho.

NextEra Energy owns Duane Arnold. Looking at its condition, CEO John Ketchum said company officials “felt really good about the ability to bring it back.”

Palisades is furthest along

The Palisades plant operated from 1971 until 2022, when its owner, Entergy, left the wholesale electricity market. The plant’s operating licence lasted until 2031.

Holtec International bought the plant and began dismantling it, though none of the steps were irreversible. Michigan officials, not wanting to lose nuclear jobs or energy, encouraged Holtec to pursue reopening the plant and provided state funding. Former president Joe Biden’s administration approved a USD 1.5 billion loan to restart the facility in 2024, and the Trump administration continued the payments.

In August, Holtec began loading nuclear fuel, one of the final major phases before a reactor can restart. The company paused the process after a fuel assembly tilted from its upright position, and Holtec determined it needed to find out why. Its power purchase agreements require Palisades to be in service by March 2027.

Holtec says its efforts will restore baseload power, strengthen energy security and demonstrate the role of nuclear energy in meeting the nation’s growing electricity demand.

Big Tech to buy power for data centres

NextEra Energy and Google are collaborating to restart Duane Arnold by early 2029.

“This is a perfect example of data centres paying their own way,” Ketchum said in an interview. “We’re able to sign a long-term contract with a hyperscaler for that project. So none of the costs are being paid by residential customers in Iowa.”

Microsoft has a contract with the Crane Clean Energy Centre on Three Mile Island, just outside Harrisburg. The plant was the site of the nation’s worst commercial nuclear power accident in 1979, which destroyed one reactor and left the plant with one functioning. In 2019, Constellation Energy’s then-parent company, Exelon, shut down the functioning reactor, saying it was losing money and that Pennsylvania lawmakers had refused to subsidise it.

Constellation Energy announced in 2024 that it would spend USD 1.6 billion to restart the reactor under a 20-year agreement with Microsoft. It hopes to bring the plant back online in 2027. The Energy Department provided a USD 1 billion loan, and Deputy Energy Secretary James Danly toured the plant last week.

Jack Spencer of The Heritage Foundation said he can’t think of a worse use of taxpayer money than restarting reactors. These are low-risk projects with massive demand for the energy, so there is no reason to funnel federal dollars to these companies, said Spencer, director of the foundation’s Centre for Energy, Climate and Environment.

Conversely, Jennifer Gordon of the Atlantic Council said she thinks it is a terrific way of leveraging federal financing to get needed electricity. Gordon directs the council’s Nuclear Energy Policy Initiative.

Industry group says reactors shouldn’t close early

The World Nuclear Association said restarting nuclear reactors should be celebrated, but preventing them from closing prematurely would be the best option.

Palisades is expected to be the first nuclear plant in the world to resume generating power after beginning the decommissioning process, but other countries have restarted or refurbished reactors after long-term shutdowns, the association said. They include Canada, Armenia, Belgium, Japan, India and South Korea. Others are considering or in the process of restarting reactors.