Author: Mikołaj Oettingen

Plans to restart nuclear power plants scheduled for demolition have sparked a new trend in the US nuclear power industry. Technically sound, long-lived nuclear power plants are being officially decommissioned and then subjected to extensive safety analysis and modernization for their restart. The analysis and modernization work is financed in part by loans provided by federal authorities, and guarantees of success are provided by long-term contracts for the sale of electricity.

Case Study

In June 2022, Holtec International bought the shut-down Palisades Nuclear Power Plant in Michigan for final decommissioning and demolition. However, in September of the same year, the company announced plans to restart the plant, and a year later signed a long-term power purchase agreement with Wolverine Power Cooperative. Similarly, on Sept. 20, 2024, Pennsylvania-based Constellation Energy signed a 20-year agreement with Microsoft to sell electricity from the closed Three Mile Island-1 (TMI-1) nuclear power plant.

The mere fact that the two contracts were signed would not be unusual if the energy under consideration was not to be supplied from nuclear power plants permanently shut down but scheduled for restart. In both cases, the process of restarting them was initiated after a change of ownership of the plants. In the case of the Palisades plant, the new owner was Holtec, a company involved in the demolition business, and in the case of the TMI-1 plant the new owner was Constellation Energy, a firm previously owned by Excellion until 2022.

One of the main motivations for restarting nuclear power plants is the growing demand for zero-carbon sources of electricity in the portfolio of power companies, a condition that is being met by nuclear power. This fact is also of great importance for Poland, because at a time of growing European climate commitments and the need to reduce emissions, nuclear power is seen as a valuable zero-carbon addition to the energy mix. Zero-emission nuclear power is desired by large corporations for marketing reasons and individual customers for global environmental reasons.

In addition, the production of electricity in a nuclear power plant is not dependent on weather conditions and thus nuclear power guarantees high reliability of supply to end users. In the case of Microsoft, the total output from the TMI-1 plant is expected to power data centers focusing on the development of artificial intelligence and cloud computing, which requires a continuous and uninterrupted supply of electricity. Another argument for restarting nuclear power plants is that the price of electricity provided by long-term contracts is more predictable, and thus less susceptible to market fluctuations associated with the use of other weather-dependent energy sources. The financial model is not only crucial for restarted power plants, but also plays a strategic role for newly built power plants—as it is currently being seen in the context of the construction of the first nuclear power plant in Poland.

Author: Mikołaj Oettingen, Ph.D., Senior Research Fellow at the Casimir Pulaski Foundation, Professor at the Department of Energy and Fuels at the AGH University of Science and Technology in Krakow, Head of the Nuclear Energy Technology Group.