Palisades Nuclear Plant on Path to Recommissioning by 2025

The U.S. Department of Energy’s (DOE’s) Loan Programs Office (LPO) announced a conditional commitment of up to $1.52 billion for a loan guarantee to Holtec Palisades LLC to finance the restoration and resumption of service of the Palisades Power Plant, an 800-MW nuclear generating station in Covert Township, Michigan (Figure 1).

1. Palisades Power Plant is a single-unit pressurized water reactor nuclear station with a capacity of about 800 MW. Courtesy: Entergy

The project aims to bring the single-reactor unit back into commercial operation by the end of 2025. It was retired by previous owner Entergy in May 2022. If finalized, Holtec Palisades would be the first recommissioning of a shutdown nuclear power plant in the U.S.

“Holtec is committed to helping the nuclear and energy industries meet challenges and find solutions. Repowering Palisades helps ensure we have enough reliable, around-the-clock electricity to keep the lights on for Michigan families and small businesses while also helping mitigate climate change through safe, reliable, and carbon-free generation,” Nick Culp, Palisades Nuclear Generating Station’s senior manager for Governmental Affairs with Holtec Decommissioning International, told POWER. “Our repower efforts have been buoyed by the strong broad-based support this effort has received from our federal, state, and community partners who recognize the strategic importance of the plant to the state and nation’s clean energy future.”

The DOE said the Palisades project highlights President Biden’s “Investing in America” agenda to “support good-paying, high-quality job opportunities in communities across the country while also expanding access to affordable clean energy resources.” The project is expected to support or retain up to 600 jobs in Michigan––many of them filled by workers who have been at the plant for more than 20 years––with approximately 45% of the workforce at the site being union labor upon restart. In addition to the workers supported by the facility’s restart, if finalized, the loan guarantee would support more than 1,000 jobs during the facility’s regularly scheduled refueling and maintenance periods every 18 months.

A Long History (to Be Continued?)

The Palisades facility has a long history. Plans for the plant’s construction were first announced in January 1966. The station includes a pressurized water reactor designed and manufactured by Combustion Engineering, and it has a Westinghouse turbine-generator. The architect-engineer/constructor was Bechtel Power Corp.

Site excavation began in August 1966, first concrete was poured in March 1967, and the reactor vessel was delivered to the site on Oct. 22, 1968. The first nuclear chain reaction at Palisades occurred on May 24, 1971, and the first commercial power generation took place on Dec. 31, 1971. The unit has a maximum dependable capacity of 798 MW, but its record hourly output was 821 MWh, which occurred on Jan. 15, 2006.

At the time of its final shutdown, Entergy was the owner and operator of the plant. The company had purchased it from Consumers Energy in April 2007 for $380 million. The purchase also included receipt of the used fuel at Consumers’ decommissioned Big Rock Point Nuclear Plant, located in Charlevoix in northwestern Lower Michigan. Entergy actually acquired several nuclear plants in regions where wholesale markets operated after deregulation substantially changed the electric industry in the late 1990s. At its peak, the company operated six merchant nuclear units, with about 5,000 MW of capacity, along with five nuclear units in its regulated companies, also representing about 5,000 MW.

But the merchant business proved to be challenging for Entergy. In December 2016, Entergy proposed retiring the Palisades plant by 2018 as part of a bigger plan for the company to exit the merchant nuclear generation business altogether. Those plans changed in September 2017 after the Michigan Public Service Commission said it would only grant partial recovery ($136.6 million) of the $172 million Consumers Energy had requested for the buyout of a power purchase agreement it had with Entergy for Palisades’ output.

Palisades Shutdown and Transferred

In the end, Palisades was taken offline for the final time on May 20, 2022. The shutdown completed a record-setting run at the site—the unit had continuously generated electricity for 577 consecutive days since its last refueling, which was also a world record for a plant of its kind. Notably, Palisades was ranked in the U.S. Nuclear Regulatory Commission’s (NRC’s) highest safety category, and Entergy said the station was regarded by its peers as one of the top performers in the industry.

Following the removal of used fuel from the Palisades reactor, the facility was transferred to Holtec International on June 28, 2022, “for purposes of a safe and timely decommissioning.” Holtec was expected to complete the dismantling, decontamination, and remediation of Palisades to NRC standards by 2041.

Yet, efforts to save the Palisades plant quickly began. Holtec applied for financial support through the Civil Nuclear Credit Program, a $6 billion fund designed to help preserve the existing U.S. reactor fleet and save thousands of high-paying jobs across the country. The program was made possible by the passing of the Bipartisan Infrastructure Law. Holtec also received backing from Michigan Gov. Gretchen Whitmer, who wrote a letter to Energy Secretary Jennifer Granholm on Sept. 9, 2022, in support of Holtec’s plans to repower and reopen Palisades.

In September 2023, Holtec and Wolverine Power Cooperative, a not-for-profit power generation cooperative, agreed on a long-term deal, with Wolverine committing to purchase up to two-thirds of the power generated by Palisades for its Michigan-based member rural electric cooperatives. Wolverine’s non-profit rural electric cooperative project partner, Hoosier Energy, an alliance of 18 member cooperatives serving 59 counties across central and southern Indiana and southeastern Illinois, would purchase the balance. Today’s announcement brings Palasades’ rebirth another step closer to fruition.

Excitement Surrounds Recommissioning

“Palisades is coming back,” Gov. Whitmer said in a statement issued to POWER by her press secretary. “Thanks to an effective collaboration between the Biden-Harris administration, the State of Michigan, the Michigan Legislature, and Holtec, work will begin shortly to restart operations at Palisades. Once complete, Palisades will become the first successfully restarted nuclear power plant in American history, protecting 600 union jobs at the plant, 1,100 in the community, and access to clean, reliable power for 800,000 homes. We will lead and build the future here in Michigan with our 100% clean energy by 2040 standard, the strongest clean energy labor standards in the nation, and tools to build more renewable energy faster. Let’s keep getting it done.”

“Palisades’ carbon-free generation is essential to both Michigan and the United States achieving their clean climate goals while maintaining around-the-clock reliability to meet future demand,” added Culp. “The project is anticipated to avoid 4.47 million tons of CO2 emissions per year—in addition to other noxious greenhouse gases—for a total of 111 million tons of CO2 over the next 25 years.”

In addition to the main 800-MW reactor, Holtec has plans to use the Palisades site as the location for its first two small modular reactor (SMR) units, which will not be part of the project that may be financed under this conditional commitment. The two units will potentially add an additional 800 MW of generation capacity at the site, take advantage of existing infrastructure, and spur the domestic development of new reactor technologies, which the DOE says is critical to combatting the climate crisis.

Still, much work needs to be done to bring the existing unit back into service. “Since last year, we have participated in a series of public meetings with U.S. Nuclear Regulatory Commission staff on our proposed reauthorization of power operations at Palisades. We have made several key filings with the NRC to lay out the path to reauthorize the repowering of Palisades within the Agency’s existing regulatory framework. Among many things, the repower entails rehiring the plant workforce, reestablishing our training program, and significant investment in plant inspections, preventative maintenance, upgrades, and modifications,” explained Culp.

There is hope, however, that the work can progress fairly quickly. “We remain on track to repower the plant by the end of 2025, pending all necessary federal regulatory reviews and approvals,” Culp said. Upgrades are expected to keep the Palisades unit in operations until at least 2051, subject to NRC licensing approvals.

Detractors Persist

Yet, not everyone is pleased with the prospect of Palisades returning to service. The group Beyond Nuclear, a nonprofit 501(c)(3) membership organization that “aims to educate and activate the public about the connections between nuclear power and nuclear weapons and the need to abandon both to safeguard our future,” issued a lengthy diatribe railing against the Palisades project.

“Under this rushed schedule, there is no possible way for Holtec to complete all the decades-long overdue system repairs, refurbishment, replacements, and safety-critical upgrades previous owner Entergy never got around to, over the 15 years of its ownership of Palisades, and then ultimately simply walked away from. Given Palisades’ age-related degradation, some of these needed fixes, such as on the embrittled reactor pressure vessel, are too expensive or even impossible to do. These are the kinds of overwhelming challenges that have led to the record-breaking number of atomic reactor shutdowns in North America in the past decade. Palisades should remain closed for good,” Kevin Kamps, a radioactive waste specialist with Beyond Nuclear, said in a press release issued by the group.

“Palisades has had a distinguished record of safe and reliable operation. At the time of shutdown, Palisades ranked in the U.S. Nuclear Regulatory Commission’s highest safety category, was recognized as a top performing plant within the industry, and completed consecutive record-breaking production runs. That is both a testament to the excellent material condition of the plant as well as to the operating experience and qualifications of our plant workforce, who are onsite and returning. Like all commercial nuclear plants in the United States, a repowered Palisades would continue to operate under the independent federal oversight of the Nuclear Regulatory Commission,” Culp countered.

“We have been impressed with the U.S. Department of Energy’s loan application process. As part of the loan application process, the Palisades repower has undergone rigorous financial, technical, legal, and market analysis by the U.S. Department of Energy’s professional staff, which includes qualified engineers, financial, and legal experts, as well as expert third-party advisors,” he added.

Return to Service Much Faster Than New-Build

Because the plant’s infrastructure already exists, the Palisades project does not involve traditional major construction activities, but it will require inspections, testing, refurbishment, rebuilding, and replacement of existing equipment. Holtec is currently pursuing a reauthorization of the Palisades operating license with the NRC, the Federal agency responsible for regulating and licensing commercial nuclear power plants in the U.S. To date, Holtec has submitted three NRC licensing requests in pursuit of license reauthorization and anticipates submitting the remainder in spring 2024.

The LPO said that while the conditional commitment demonstrates the DOE’s intent to finance the project, Holtec must satisfy certain technical, legal, environmental, and financial conditions before the Department enters into definitive financing documents and funds the loan.

Aaron Larson is POWER’s executive editor (@POWERmagazine).

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