NextEra Energy is contemplating the revival of a nuclear plant in Iowa in response to the increasing demand for sustainable energy alongside a significant surge in electricity consumption.
The Duane Arnold Energy Center in Palo, Iowa halted its operations in 2020 after running for 45 years. The CEO of NextEra, John Ketchum, emphasized the need for a thorough risk assessment to determine the feasibility of restarting the reactor.
During the second-quarter earnings call on Wednesday, Ketchum stated, “Reviving Duane Arnold could lead to substantial market demand and opportunities. We are currently assessing this possibility and would proceed only if we ensure minimal risks and sufficient safeguards.”
Scheduled for retirement towards the end of 2020, Duane Arnold had to stop operations two months earlier than planned due to damage caused by a severe windstorm (derecho) that impacted parts of the facility, including its cooling towers.
Nuclear power has witnessed a decrease in popularity in the past decade as plants faced competition from more economical alternatives like natural gas and renewable sources. Concerns about safety also rose after the 2011 Fukushima nuclear disaster in Japan. According to the Congressional Research Service, a total of twelve nuclear reactors in the U.S. were decommissioned between 2013 and April 2021.
Despite this trend, interest in nuclear energy is resurfacing as the U.S. deals with a significant rise in power demand driven by data centers for artificial intelligence, a resurgence in domestic manufacturing, and the economy’s shift towards electricity.
“Existing nuclear power plants are currently in high demand in the energy sector,” remarked Mark Nelson, the founder of Radiant Energy Group, during CNBC’s “Last Call” segment in June. “They will have a significant impact on price negotiations with data centers located nearby.”
The need for electricity is increasing as the U.S. strives to reduce carbon dioxide emissions by accelerating the adoption of renewable energy sources. However, solar and wind power face challenges in providing consistent electricity due to their reliance on weather conditions.
While stakeholders in the renewable energy sector anticipate that battery storage will eventually address this challenge, utility administrators argue that nuclear and natural gas are essential to ensuring grid reliability.
CEO Chris Womack of Southern Company recently promoted the installation of over 10 gigawatts of new nuclear power in the U.S. to match the growing demand for electricity. Despite facing delays and exceeding the budget, Southern Company, a leading U.S. utility, completed the first new nuclear plant in decades last year.
The push for new nuclear power has also encountered resistance. CEO Andrés Gluski of AES Corporation expressed skepticism about the enthusiasm for nuclear energy, pointing out the high costs associated with building new facilities.
In contrast, the tech industry demonstrates a growing interest in nuclear energy as a reliable power source for data centers. Amazon Web Services recently acquired a nuclear-powered data facility from Talen Energy for $650 million. Moreover, the technology giant is negotiating with Constellation Energy to procure electricity from a nuclear plant on the East Coast, according to sources familiar with the matter cited by The Wall Street Journal.
The U.S. currently leads the world with the largest operational nuclear fleet, comprising 94 active reactors. To prevent further reactor closures, the Biden administration has introduced tax incentives under the innovative Inflation Reduction Act. By collaborating with more than 20 countries, the U.S. has committed to tripling nuclear power generation by 2050 to combat climate change.
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