NextEra Energy is considering the reactivation of a nuclear facility in Iowa due to the growing demand for sustainable power in tandem with a notable surge in electricity usage.
The Duane Arnold Energy Center in Palo, Iowa ceased operations in 2020 after operating for 45 years. CEO John Ketchum of NextEra highlighted the necessity for a comprehensive risk evaluation to assess the viability of restarting the reactor.
During NextEra’s second-quarter earnings call on Wednesday, Ketchum remarked, “There would be substantial market demand and opportunities if we were to revive Duane Arnold. We are currently evaluating this prospect and would only move forward under conditions ensuring minimal risks and adequate safeguards.”
Initially scheduled for retirement near the end of 2020, Duane Arnold was forced to halt operations two months earlier than planned due to damage caused by a severe windstorm known as a derecho, which affected parts of the facility, including its cooling towers.
Nuclear energy has experienced a decline in popularity over the last decade as plants grappled with competition from more cost-effective alternatives such as natural gas and renewable sources. Safety apprehensions also escalated following 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 from 2013 through April 2021.
Rising Demand for Sustainable Energy
Despite this trend, interest in nuclear power is reemerging as the U.S. confronts a substantial upsurge in power demand fueled by artificial intelligence data facilities, a resurgence of domestic manufacturing, and the transition of the economy to electricity.
“Existing nuclear plants are currently highly sought after in the energy sector,” observed Mark Nelson, the founder of Radiant Energy Group, during CNBC’s “Last Call” segment in June. “They will wield considerable influence in negotiating prices with data facilities located in close proximity.”
The need for electricity is on the rise while the U.S. aims to curtail carbon dioxide emissions by expediting the integration of renewable energy sources. However, solar and wind power encounter challenges in delivering consistent electricity due to their reliance on weather patterns.
While stakeholders in the renewable energy domain anticipate that battery storage will eventually resolve this issue, utility administrators argue that nuclear and natural gas are crucial to ensuring grid reliability.
CEO Chris Womack of Southern Company recently advocated for the installation of over 10 gigawatts of new nuclear power in the U.S. to meet the surging demand for electricity. Southern Company, a prominent U.S. utility, completed the inaugural new nuclear plant in decades last year, despite encountering delays and exceeding the budget.
The drive for new nuclear power has encountered opposition as well. CEO Andrés Gluski of AES Corporation expressed doubts regarding the enthusiasm for nuclear energy, highlighting the exorbitant costs linked to constructing new facilities.
Conversely, the tech sector demonstrates a burgeoning interest in nuclear power as a dependable energy source for data centers. Amazon Web Services recently acquired a nuclear-powered data facility from Talen Energy for $650 million. Furthermore, the cloud services giant is in talks with Constellation Energy to procure electricity from a nuclear plant on the East Coast, as per sources familiar with the matter cited by The Wall Street Journal.
The U.S. currently boasts the largest operational nuclear fleet worldwide with 94 active reactors. To avert further reactor closures, the Biden administration has introduced tax incentives under the groundbreaking Inflation Reduction Act. Collaborating with over 20 nations, the U.S. has pledged to triple nuclear power generation by 2050 to combat climate change.
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