(Reuters) -The U.S. Department of Energy (DOE) said on Wednesday it would loan Holtec International $1.52 billion to help restart an 800MW nuclear power plant in Michigan that was shut down in 2022, potentially making it the first nuclear plant to be recommissioned in the United States.
The conditional loan by the Energy Department's loan program office was authorized through passage of the Inflation Reduction Act in 2022. The loan is dependent on Holtec meeting several technical, legal, environmental, and financial conditions, according to the DOE loan office.
The Biden administration has said that nuclear energy will play a key role in decarbonizing the country's power grid by 2035 and the entire economy by 2050.
The re-started Palisades plant would avoid 4.47 million tonnes of CO2 emissions annually for a total of 111 million tonnes of CO2 emissions during its projected 25 years of operation.
Florida-based Holtec said the plant would employ more than 600 workers, with about 45% of the workforce at the site coming from union labor once it's restarted.
The company also plans to build what will be its first two small modular reactor (SMR) units at the site, which will not be part of the project that is eligible for the loan.
NuScale's SMR technology is the only one to have received design certification from the U.S. nuclear power regulator last year. But the company has faced cost and subscription issues and had to shelve one of its SMR projects.
Holtec originally bought Palisades in 2022 from Entergy (NYSE:ETR) to decommission the plant as it struggled to compete with natural gas-fired plants and renewable energy, but started looking into reopening the shut reactor.
The company has also already signed long-term Power Purchase Agreements (PPAs) with electric co-ops Wolverine Power Cooperative and Hoosier Energy in Michigan, Illinois, and Indiana.
Holtec is pursuing a reauthorization of the Palisades operating license with the Nuclear Regulatory Commission.
Reuters in January reported that the company was in talks for the loan from the DOE for the plant.