Duane Arnold nuclear plant considered for reopening; residents have
concerns with company
[image: Portrait of Donnelle Eller]Donnelle Eller
<https://www.desmoinesregister.com/staff/2647975001/donnelle-eller/>
Des Moines Register
- NextEra Energy is considering restarting Iowa's Duane Arnold nuclear
plant, which was closed in 2020 after derecho damage, to meet growing
energy demands from tech companies.
- The potential restart faces challenges, including community distrust
stemming from the plant's closure and the construction of a solar farm that
some residents oppose.
- Demand for nuclear power from tech giants like Meta, seeking to fuel
their data centers with clean energy, is driving interest in restarting
nuclear plants nationwide.
- While restarting an existing plant like Duane Arnold presents fewer
technological risks than building a new one, the extent of the damage and
the overall cost remain uncertain.
- The decision to restart the plant ultimately hinges on its economic
viability and whether NextEra can secure agreements with tech companies or
other buyers for the generated power.
NextEra Energy may have to rebuild more than just cooling towers destroyed
by a derecho as it weighs restarting Iowa's only nuclear plant to fuel the
tech industry's exploding energy needs, say some elected leaders.
"There's a tremendous distrust of NextEra," says state Rep. Cindy Golding,
who represents rural Linn County, including the town of Palo northwest of
Cedar Rapids, where the Duane Arnold nuclear plant is located.
Florida-based NextEra closed Duane Arnold in 2020 after an Aug. 10 derecho
that year caused extensive damage to its cooling towers.
NextEra Energy Resources, a subsidiary, later built a $300 million solar
farm nearby.
Last summer, NextEra raised the possibility it may restart
<https://www.desmoinesregister.com/story/money/2024/09/26/three-mile-island-nuclear-power-plant-duane-arnold-iowa-reopening/75349191007/>
the
nuclear plant. CEO John Ketchum said in October the company is conducting
engineering studies and speaking with federal regulators and “local
stakeholders” about restarting the plant.
“There’s very strong interest from customers, really, data center
customers,” Ketchum said.
Golding, a Republican, said she spoke with NextEra officials last week. The
"first thing they have to do is repair their damaged image and their
community relations," she said, adding that the company is reaching out to
other Iowa legislators as well.
Palo Mayor Eric Van Kerckhove said no one from NextEra has reached out to
the city or residents. When NextEra does, the company will find "there's
some animosity," he said.o Several residents dislike the solar arrays that
crowd hundreds of acres near the town. A few have even moved to get away
from them, Van Kerckhove said.
"Some people wondered if the solar even needed to be built," given interest
in restarting Duane Arnold, he said.
NextEra Resources didn't immediately respond to a request for comment.
Despite residents' concerns about NextEra, discussions about potentially
restarting Duane Arnold have "created a pretty positive buzz around town,"
said Van Kerckhove, who hopes regaining the nuclear plant's high-paying
jobs will attract new workers to the town of about 1,500 people.
The loss of the plant hurt the community, he said, adding, "Some of those
folks had to find employment somewhere else.
"We're kind of excited to potentially see some of those high paying jobs
come back to the community," he said.
Data center power demand driving nuclear projects around the country
Propelling NextEra Energy’s efforts to reopen Duane Arnold is demand like
that of Facebook owner Meta Platforms, said Akshat Kasliwal, a managing
consultant at PA Consulting Group. Like Microsoft, Google and other tech
giants, California-based Meta is lining up nuclear generation to meet its
data centers' voracious energy needs to power artificial intelligence,
high-speed streaming and remote work.
Earlier this month, it asked developers to explore
<https://sustainability.atmeta.com/blog/2024/12/03/accelerating-the-next-wave-of-nuclear-to-power-ai-innovation/>
building
1 gigawatt to 4 gigawatts of dedicated nuclear power “to help us meet our
AI innovation and sustainability objectives.”
To get a sense of the Meta’s future energy demand: 1 gigawatt is enough
energy to power about 750,000 homes, experts say.
NextEra has the financial heft and experience needed to restart Duane
Arnold, Kasliwal said.
"Obviously, these tech companies are trying to get their hands on all the
power they can find as soon as possible," he said. "In this case, you would
not be looking at an untested reactor design. "You'd be looking at
something that was in operation effectively. So, it's a little technology
de-risked from that standpoint."
NextEra’s interest comes as Maryland-based Constellation Energy plans
to restart
an undamaged reactor
<https://www.constellationenergy.com/newsroom/2024/Constellation-to-Launch-Crane-Clean-Energy-Center-Restoring-Jobs-and-Carbon-Free-Power-to-The-Grid.html>
at
Pennsylvania's Three Mile Island nuclear plant, the site in 1979 of the
largest nuclear meltdown in U.S. history. It would provide 835 megawatts to
serve Microsoft Corp.'s data center energy needs over the next two decades.
Repowering Three Mile Island is expected to cost $1.6 billion, the utility
estimates
<https://www.sec.gov/ix?doc=/Archives/edgar/data/0001868275/000186827524000058/ceg-20240920.htm>
.
And in March, the U.S. Department of Energy said it would provide Holtec
International, the Florida company that owns the Palisades nuclear plant in
Michigan, with a $1.52 billion loan to help restart that shuttered
800-megawatt plant.
But bringing “a zombie nuke” back to life is “easier said than done,”
Kasliwal said.
Other utilities considering nuclear power
Political leaders have touted Iowa’s low-cost, clean energy for attracting
$12.3 billion in large Facebook, Google, Microsoft and Apple data center
projects to the state since 2007. Iowa gets 60% of its energy from wind,
the largest share for any state, with much of that wind generation capacity
coming from MidAmerican Energy.
MidAmerican, the Des Moines utility owned by Warren Buffett’s Berkshire
Hathaway, said last week in an email it’s “not planning to construct a
nuclear generating facility to serve a single customer” like Meta.
But MidAmerican said it will pursue nuclear energy, continuing its
plans to develop
a small modular reactor
<https://www.desmoinesregister.com/story/money/business/2024/11/04/midamerican-energy-study-outlines-20-years-of-power-generation-needs-solar-natural-gas-nuclear/75994502007/>
by
the mid-2030s that would provide 345 megawatts of nuclear energy and 155
megawatts of salt-based storage that extends generating capacity and "serve
all customers."
It’s closely watching PacifiCorp., a Berkshire-Hathaway-owned sister
utility of MidAmerican, and TerraPower, a company co-founded by Microsoft
billionaire Bill Gates, as they develop a modular reactor called the
Natrium in Wyoming that’s set to come online by 2028. The U.S. Department
of Energy is providing nearly $2 billion of the projected $4 billion cost.
“We’re also looking to see how the nuclear energy industry navigates
through technological developments and any regulatory changes,” said
MidAmerican, which currently owns 25% of the Quad Cities Clean Energy Center
<https://url.us.m.mimecastprotect.com/s/6DBSCOYXNyhZOV12lSEf8CL-rT6?domain=constellationenergy.com>,
a nuclear plant in Cordova, Illinois.
*More:*Iowa residents contend solar, wind projects get in the way of their
communities' growth
<https://www.desmoinesregister.com/story/money/agriculture/2023/03/07/iowa-wind-solar-farms-opposition-prompt-statewide-restrictions-legislature/69924871007/>
In 2018, NextEra and Alliant Energy, Iowa's other major power supplier.
announced an early end of its agreement to purchase power from the plant.
The companies said the move, along with repowering existing wind farms,
would save Iowa energy customers $300 million over roughly two decades.
The six-decades long decommissioning is estimated to cost about $1 billion,
according to documents filed with the U.S. Nuclear Regulatory Commission.
Alliant said in an email earlier this month that while nuclear energy isn’t
part of its energy mix now, it continues “to explore all generation options
as we regularly review and update our plans to meet future economic
developments, evolving energy technologies and emerging trends in the
communities we serve.”
Nuclear energy 'an intriguing option for Iowa to consider'
Some states are providing incentives to spark nuclear development. Michigan
has earmarked $150 million to repower Palisades, for example, and Utah’s
governor wants to set aside $20 million for nuclear development.
The Iowa Economic Development Authority said it hasn’t yet finalized its
legislative agenda. The list doesn’t include incentives for nuclear energy,
“However, we are proponents of an all-of-the-above energy strategy for
Iowa, including diverse energy resources and technologies,” Staci Hupp
Ballard, the economic development agency’s spokesperson, said in an email.
“We feel that nuclear energy is an intriguing option for Iowa to consider
adding to our future energy mix.”
That may become an issue as Iowa's data center industry continues to grow.
Meta's Facebook investment in Iowa data centers is huge, with the company's
most recent expansion at its Altoona data center complex pushing it to 5
million square feet, the company's largest
<https://www.desmoinesregister.com/story/news/local/altoona/2021/12/15/facebook-data-center-locations-meta-stock-altoona-site-largest-country/8899645002/>
.
And Meta is talking with Davenport about investing $800 million building
data centers on about 330 acres in the Mississippi River city of 100,400
people. The 715,000-square-foot facility would have at least 50 full-time
employees, city documents show. Davenport proposes exempting $161 million
in property taxes for Meta over two decades. The city would get $107
million in taxes over that time.
Cedar Rapids could see two large data center projects break ground in the
months ahead: Google <https://www.iowaeda.com/iowa-news/ieda-march2024/> plans
a $576 million data center project and a yet-unnamed company proposes to
build a $750 million data center, similar in size to Meta's in Davenport.
The Cedar Rapids Gazette reported the unnamed project would be the city’s
largest ever
<https://www.thegazette.com/news/bigger-than-google-new-data-center-proposed-for-cedar-rapids/>
.
Ballard said the agency can’t discuss a project until it goes to economic
development board for consideration.
Davenport's community and economic development director, Bruce Berger, said
in an email that Meta has "purchased ground and is conducting
pre-development due diligence activities. So it is fair to say that a large
data center project has *plans* to develop in Davenport."
Duane Arnold and Three Mile Island could have a relatively smoother path to
restarting their plants, since the owners would be returning power to the
grid, said Amy Roma, a partner at the global law firm Hogan Lovells in
Washington, D.C.
“They’re threading the needle on providing economic benefits to the local
community, providing the power that the data center needs, but not
disrupting the grid because (the energy) otherwise wasn't on the grid,”
Roma said.
Constellation estimates it will cost $1.6 billion to restart part of Three
Mile Island. And the price at Duane Arnold could be “higher or lower,” said
Gary Germeroth, a PA Consulting Group partner.
Duane Arnold uses a boiling water reactor, which can be simpler than other
systems to revive, Ketchum, the NextEra CEO, said in October when talking
with analysts. "That gives us optimism of being able to do this at an
attractive price and without as much risk."
“It’s a massive unknown” how much damage Duane Arnold has sustained,
especially to its cooling towers, said Germeroth, adding that will be the
first step in determining whether it can restart the plant.
While Duane Arnold's energy would return to the grid, NextEra would likely
sell the title to the energy at a premium to a tech company or other buyer,
ensuring that Iowa ratepayers wouldn't pay more for higher-cost energy.
Roma said new nuclear developers and existing plant owners will need to
determine if they can make the numbers work.
"Ultimately it comes down to a business decision," she said. "Can you make
money?"
*Donnelle Eller covers agriculture, the environment and energy for the
Register. Reach her at [log in to unmask] <[log in to unmask]>*.
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