Dive Brief:
- NextEra Energy continues to evaluate the possibility of reopening the Duane Arnold nuclear power plant in Iowa amid growing interest from data center companies, CEO John Ketchum told investors Thursday during a third quarter earnings call.
- Duane Arnold's boiling water reactor could make it easier to restart and operate economically than other nuclear power plants, Ketchum said. New nuclear technologies like small modular reactors remain uneconomical, Ketchum said.
- Nuclear will likely supply just a fraction of the 900 GW the U.S. needs to add by 2040 to keep up with demand, Ketchum said.
Dive Insight:
Despite the recent fervor among tech companies and investors about nuclear energy, Ketchum held that renewables and storage will likely play a greater role in meeting new energy demand for at least two decades to come.
“Nuclear will play a role, but there are some practical limitations,” he said. “There are only a few nuclear plants that can be recommissioned in an economic way ... But even with a 100% success rate on those recommissionings, we would still only meet less than 1% of that [new] demand.”
Equity analysts had anticipated that the company might announce a deal to restart the 601 MW Duane Arnold plant during the Thursday call despite potential challenges such as competition with robust regional wind resources, according to Jefferies Research Services. And although the expected announcement did not come, Ketchum said the plant could be among the few that could reopen and operate economically. The company is currently running engineering assessments and speaking with local stakeholders about what it would take to reopen the plant, he said.
But Ketchum said he was “not bullish” on the newer SMR technology. NextEra has an in-house team dedicated to SMRs, he said, but so far they have not drawn favorable conclusions about the technology.
“A lot of [SMR equipment manufacturers] are very strained financially,” he said. “There are only a handful that really have capitalization that could actually carry them through the next several years.”
Ketchum also raised questions about the availability of nuclear fuel in the United States, and noted that SMRs remain “very expensive” even as the cost of renewable energy continues to fall.
“We're prioritizing other generation resources at this time,” he said. “Renewables are here for the long haul.”
Ketchum also announced that NextEra had secured two framework agreements for the potential development of up to 10.5 GW of renewables and storage to be built through 2030. Although company executives said they were not yet able to identify which companies had countersigned the agreements, they described them as “Fortune 50” companies outside the tech industry.
New demand from data centers and tech hyperscalers amid an increasingly limited supply of new generation projects has put pressure on other industries that are also looking to secure renewable energy, Ketchum said. “All ships are rising with the tide here,” he said, “because they may be facing higher power prices down the road.”
The company reported a net income of $1.85 billion, compared to $1.22 billion in the third quarter of 2023.
