AI's thirst for energy has another nuclear plant coming online
The Department on Energy closed on a $1.52 billion loan to Holtec Palisades on Monday in a first-of-its-kind effort to fund the restoration of a nuclear power plant in Michigan.
The historic loan funded by the Inflation Reduction Act’s Energy Infrastructure Reinvestment project comes as increasing AI energy demands are sparking renewed interest in nuclear power.
The Department of Energy said the effort will be “generating carbon pollution-free energy and saving and expanding a union workforce in Michigan while helping strengthen America’s nuclear energy sector and advance core climate and domestic energy goals.”
Michigan Governor Gretchen Whitmer said in a statement that “Reopening Palisades will keep energy costs low, shore up domestic energy production, and secure Michigan’s competitiveness for future economic development.”
The plant ceased operations in 2022, but will brought back online as early as 2025. The project will add about 600 jobs to the area.
Holtec originally bought the plant with the plan to dismantle it, but changed course amid renewed interest in nuclear power.
Microsoft (MSFT) recently announced that it needs so much energy to power AI it was turning to Three Mile Island, which will reopen its nuclear facilities by 2028. Three Mile Island was notably the site of the worst accident ever at a U.S. commercial nuclear power plant in 1979.
The International Energy Association said in a report on electricity demand earlier this year that data centers will make up a third of new energy needs in the U.S. through 2026 and more than double worldwide by 2026 to 1,000 terawatt-hours.
“This demand is roughly equivalent to the electricity consumption of Japan,” the IEA said. “Updated regulations and technological improvements, including on efficiency, will be crucial to moderate the surge in energy consumption.”
— Melvin Backman contributed to this article.
