US government spends billions to reopen an old nuclear power plant
The White House is backing nuclear power. A pressurized water reactor that was shut down for economic reasons will soon be running.
The Palisades nuclear power plant in Michigan (circa 1974)
(Image: Department of Energy (gemeinfrei))
Built in 1967, the Palisades nuclear power plant in Michigan went into operation in 1971. It was decommissioned in 2022 for economic reasons and should have been dismantled within 20 years. However, considering rising electricity consumption [--] not least due to artificial intelligence, electric cars and the electrification of heating systems –, the US government is increasingly turning to nuclear power. Billions of dollars are to help reopen the old nuclear power plant. It can generate around 800 megawatts. Environmentalists consider the long-term risk to be unjustifiable.
The US Department of Energy grants power plant owner Holtec a loan guarantee for a maximum of 1.52 billion dollars. An important condition for US President Joe Biden is that the operator only hires unionized employees. The state of Michigan is contributing 150 million dollars directly, and another 150 million dollars for accompanying measures. As if that were not enough, the US Department of Agriculture is providing more than 1.3 billion dollars. This money is going to two energy cooperatives so that they can buy the expensive nuclear power and sell it to end customers at a reduced price. The federal money comes from the budget pots agreed in the Inflation Reduction Act.
The White House hopes that Palisades will be back online by the end of next year, employing up to 600 people. The operating license runs until 2031, but is to be extended until 2051. The nuclear power plant would then be 80 years old. Holtec would also like to build a so-called Small Modular Reactor with a nominal output of 300 watts (SMR-300) at the site in the mid-2030s.
Cheap is different
Microsoft also wants to revive a US nuclear power plant, as data centers for artificial intelligence require an astonishing amount of electricity. The data company has chosen a reactor at Three Mile Island in Pennsylvania, of all places. The worst nuclear accident in US history occurred there in 1979. The cooling pumps in Unit 2 of the then ultra-modern nuclear power plant switched off instead of cooling the nuclear fuel rods after a safety valve malfunctioned. This resulted in a partial core meltdown. Radioactively contaminated gases were released into the air and cooling water ran into the Susquehanna River.
Nevertheless, Three Mile Island supplied electricity to the grid until 2014, when it was no longer competitive. Microsoft will have to dig deep into its pockets accordingly. The investment required to make the 837-megawatt reactor operational again by 2028 is estimated at 1.6 billion dollars. In return, Microsoft undertakes to purchase all the electricity produced for 20 years.
The negotiated electricity price is not public. An analyst from Jefferies LLC believes that Microsoft will pay 112 US dollars per megawatt hour – on this basis, he expects the share price of power plant owner Constellation Energy to double. Renewable electricity from wind or solar power is comparatively cheap in the region at 60 dollars per megawatt hour, but is not reliably available at all times.
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