AI Energy is to get Michigan’s nuclear power up and running next year

Department of Energy closed a $1.52 billion loan to Holtec Palisades on Monday in a first-of-its-kind effort to finance the restoration of a Michigan nuclear power plant.

The historic loan financed by the Energy Infrastructure Reinvestment Project of the Inflation Reduction Act comes as increasing AI energy demand are renewed sparks interest in nuclear energy.

The Energy Department said the effort will “generate carbon-free energy and save and expand unionized labor in Michigan, while helping to strengthen America’s nuclear power sector and advance central climate and domestic energy goals.” .

Michigan Governor Gretchen Whitmer said in a statement that “Reopening the Palisades will keep energy costs down, support domestic energy production and ensure Michigan’s competitiveness for future economic development.”

The plant ceased operations in 2022, but will come back online as early as 2025. The project will add about 600 jobs to the area.

Holtec originally bought the plant with plans 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 that it is heading to Three Mile Island, which will reopen its nuclear facilities by 2028. Three Mile Island was notably the site of the worst nuclear plant accident US commercial nuclear in 1979. .

The International Energy Association said in a report on electricity demand earlier this year that data centers will offset a third of new energy needs in the US by 2026 and more than double worldwide by 2026 to 1,000 terawatt-hours.

“This demand is roughly equivalent to Japan’s electricity consumption,” the IEA said. “Updated regulations and technological improvements, including efficiency, will be crucial to moderate the increase in energy consumption.”

— Melvin Backman contributed to this article.