The U.S. Department of Energy has provided $1.9 billion in loans to NextEra Energy for the renovation and restart of the Duane Arnold Energy Center in Iowa. This nuclear power plant has been in a shut-down state since 2020, but now, due to the increased electricity demand brought about by the AI data center, it has once again become a source of power supply that large technology companies are paying attention to.

Second loan of the same type

This is the second large loan recently provided by the U.S. government to restart a shut-down nuclear power plant. Last year, the Department of Energy provided $1 billion in loans to Constellation Energy to restart a reactor at Three Mile Island. These two consecutive financings indicate that the United States is considering restarting old nuclear power plants as one of the practical solutions to meet the increasing electricity demands of the tech industry.

U.S. Deputy Secretary of Energy James Danly stated that the Duane Arnold nuclear power plant is scheduled to resume operation in 2029, and claimed that the project will help to lower electricity prices. However, reports mention that only 50 megawatts of capacity have been allocated to the local electric cooperatives.

Google is deploying data centers in surrounding areas

It is reported that Google is considering building up to 6 data centers near the Duane Arnold Nuclear Power Plant. The nuclear power plant, located in Iowa, was shut down in 2020 after being damaged by heavy rainfall. At that time, natural gas prices were low, making the economic viability of repairing the nuclear power plant limited, and NextEra ultimately chose to decommission it.

However, the situation has changed significantly in recent years. With the rapid development of AI, coupled with the advancement of electrification in areas such as transportation and industry, the long-term stability of electricity demand in the United States has come to an end, and utility companies have begun to seek new, stable sources of power. Reports cite forecasts that by 2035, the construction of new data centers could drive electricity demand in this industry to nearly three times its current level.

Out-of-service nuclear power plants are once again in demand

For tech companies, nuclear power plants that have ceased operation are becoming an increasingly viable option for supplying clean and stable electricity. Microsoft has previously signed a contract with Constellation Energy to restart a reactor at Three Mile Island, which was shut down in 2019, with plans to bring it back online by 2028, expected to generate 835 megawatts of electricity.

Meta has also reached an arrangement with Clinton Clean Energy Center in Illinois, which is under the umbrella of Constellation. According to reports, Meta will purchase all the clean energy attributes of this 1.1 gigawatt nuclear power plant, while the electricity generated by the plant will still be fed into the local power grid.

The Duane Arnold project is relatively small in scale, but after completion of the renovation, NextEra plans to increase its power generation capacity by another 14 megawatts, bringing the total installed capacity to 615 megawatts. Reports suggest that among the existing shut-down nuclear power plants in the United States, such projects are considered to be among those that are relatively easier to advance.