Dive Brief:
- The U.S. Department of Energy has disbursed a $56.8 million loan installment to Holtec International to support the nuclear power company’s planned restart of the 800-MW Palisades nuclear plant in Michigan, DOE said Monday.
- The disbursement is the second under an up to $1.52 billion loan guarantee for the project, which the Biden administration finalized in September, and a signal that the Trump administration will continue to fund at least some Biden-era energy production initiatives.
- “Unleashing American energy dominance will require leveraging all energy sources that are affordable, reliable and secure — including nuclear energy,” Energy Secretary Chris Wright said in a statement.
Dive Insight:
The announcement name-checks the DOE Loan Programs Office, which committed tens of billions of dollars to dozens of mostly clean-energy projects during Biden’s term.
Early in its history, LPO backed loans to several successful clean technology ventures, including $465 million to Elon Musk’s Tesla to help the electric carmaker build its first major production facility. But the office became a political punching bag after taking a $528 million loss on its loan guarantee to the failed U.S. solar manufacturer Solyndra. Underwriting activity remained muted during the second Obama term and first Trump term before increasing sharply under its previous director, Jigar Shah, a Biden appointee.
With LPO facing an uncertain future in Trump’s second term, its staff raced to commit funds Congress appropriated in the Inflation Reduction Act of 2022 and finalize loan commitments inked earlier in Biden’s term. Trump temporarily froze funding for a broad range of federal programs early in his term, including those at DOE, and the status of many individual programs remains unclear. A DOE webpage that previously outlined detailed guidance for LPO’s Title 17 Clean Energy Financing program now redirects to the DOE homepage.
DOE’s Monday announcement suggests the Trump administration may refocus the LPO’s efforts on supporting Trump’s Day-1 commitment to support U.S. energy resources other than wind and solar.
“This announcement highlights DOE’s commitment to advance President Trump’s agenda of unleashing affordable, reliable, and secure energy through investing in projects across the country that support American jobs, bolster domestic supply chains, and strengthen America’s position as a world energy leader,” DOE said.
But in an interview with the Daily Caller News Foundation last week, Wright described plans for a less active LPO that would defer to the private sector while deploying capital “if there are issues that are critical and have to happen in a timely fashion because of the mess we’re in with our electricity grid today.”
LPO’s Palisades loan commitment could bear fruit relatively soon. Despite vocal opposition from some plant neighbors and anti-nuclear groups, Holtec said last year that it remains on track to restart operations at the plant toward the end of this year, less than four years after former owner Entergy shut it down.
The U.S. Nuclear Regulatory Commission aims to issue final decisions on outstanding licensing actions by July 31, it says.
Palisades is likely to be the first retired U.S. nuclear power plant to restart operations. Constellation Energy and NextEra Energy have also announced plans to restart retired plants later this decade.
