The Duane Arnold Energy Center in Palo, Iowa stopped operating in 2020 after serving for 45 years. NextEra CEO John Ketchum mentioned the need for a thorough risk assessment to determine the feasibility of restarting the reactor.
“If we were able to do something with Duane Arnold, there would be opportunities and a lot of demand from the market,” Ketchum shared during NextEra’s second-quarter earnings call on Wednesday.
“We’re exploring this possibility,” he continued. “But we would only proceed if we could ensure minimal risks and have enough safeguards in place. There are several aspects we need to address.”
The Duane Arnold plant was initially set for retirement toward the end of 2020 after Alliant Energy, a major customer, sought cheaper energy sources. Due to a powerful windstorm known as a derecho damaging parts of the plant, including its cooling towers, the plant ceased operations two months sooner than planned.
Nuclear power had declined in popularity over the past decade as plants struggled to compete with cheaper alternatives like natural gas and renewables. Safety concerns were also raised following the 2011 Fukushima nuclear incident in Japan. According to the Congressional Research Service, a total of twelve nuclear reactors in the U.S. were closed from 2013 through April 2021.
Demand for clean energy on the rise
However, interest in nuclear power is resurging as the U.S. faces a significant surge in power demand driven by artificial intelligence data centers, a revival of domestic manufacturing, and the transition of the economy to electricity.
“The existing nuclear plants are highly sought after in the power sector right now,” noted Mark Nelson, founder of Radiant Energy Group, during CNBC’s “Last Call” in June. “They will have great leverage in negotiating prices with data centers located near their facilities.”
The need for electricity is increasing while the U.S. is striving to reduce carbon dioxide emissions by accelerating the deployment of renewable energy. Solar and wind energy, however, face challenges in providing consistent power due to their dependence on weather conditions.
Although executives in the renewable energy sector believe that battery storage will eventually address this issue, utility executives argue that nuclear and natural gas are essential to ensure grid reliability.
Southern Company CEO Chris Womack recently stated that he believes the U.S. needs to install over 10 gigawatts of new nuclear power to meet electricity demand. Southern Company, a major U.S. utility, completed the first new nuclear plant in decades last year, although the project faced delays and exceeded the budget.
The push for new nuclear power has also faced criticism. AES Corporation CEO Andrés Gluski expressed skepticism about the enthusiasm for nuclear power, citing the high costs associated with constructing new plants.
On the other hand, the tech industry has shown a growing interest in nuclear power as a reliable energy source for data centers. Amazon Web Services recently acquired a data center powered by nuclear energy from Talen Energy for $650 million. Additionally, the cloud service giant is in discussions with Constellation Energy to source electricity from a nuclear plant on the East Coast, according to sources familiar with the matter as reported by The Wall Street Journal.
The U.S. currently maintains the largest nuclear fleet globally with 94 operational reactors. To prevent more reactors from shutting down, the Biden administration has introduced tax credits under the landmark Inflation Reduction Act. In a joint effort with over 20 countries, the U.S. pledged to triple nuclear power by 2050 to combat climate change.
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