US Department of Energy awards up to $1.9B loan for nuclear plant restart

PALO — The U.S. Department of Energy has closed on a loan of up to $1.9 billion to support the restart of Iowa’s only nuclear energy station, Duane Arnold Energy Center. 

U.S. Deputy Secretary of Energy James Danly said Tuesday in Palo the “unmothballing” of sites like Duane Arnold are part of a larger strategy from President Donald Trump to “quadruple” the amount of nuclear energy in the nation by 2050. Danly called this effort a “nuclear renaissance.” 

Duane Arnold, which ceased commercial operation in 2020 and is slated to be back online by early 2029, is a 615-megawatt nuclear facility near the city of Palo now owned by NextEra Energy Resources. 

Danly said Duane Arnold is a “significant anchor facility” for Iowa and for Linn County. According to a study on the facility’s restart, Duane Arnold Energy Center is projected to have a $9.1 billion economic impact to the state of Iowa over a 25-year span. 

“It’s something that is going to help us achieve the objective of energy dominance,” Danly said. “… The loan that the U.S. Department of Energy provided is going to pay dividends for years and years and years. You couldn’t have a wiser use of money.” 

Once operational, the plant itself will offer more than 400 permanent jobs. According to spokespeople for NextEra, about 40% of the staff who have come on with the plant’s restart are “returnees” or people who worked at the facility while it was operational between 1975 and 2020. 

Some of the staff members, like Paul Hansen, retired after the decommissioning, but have come back to work at the plant again. Hansen started at Duane Arnold in 1985 and now serves as the engineering director for the facility. 

Hansen, while giving a tour of the nuclear energy center, said the control room is one of several areas NextEra is upgrading at the facility as part of the restart. 

The control room features a semi-circle wall full of levers, green and red buttons, lights and meters. Hansen said most of it is “’60s technology” and while it still works, there are pieces of the control room that are going to be upgraded to better, integrated computer systems and touchscreen controls. 

A view from inside the plant

In addition to the upgrades to the control room, Duane Arnold will also have a new training facility onsite, storage facilities, a maintenance building and new cooling towers that will be slightly larger to accommodate the greater power generation of the restarted plant.

Brian Bolster, CEO and president of NextEra, said the DOE loan will help to “facilitate” the restart at Duane Arnold, which in turn works to fulfill an “all of the above” energy strategy, improve energy security and “keep energy costs affordable for everyday Americans.”

“Duane Arnold can strengthen the grid while helping to ensure Iowa families and businesses are not asked to bear the cost of growth,” Bolster said during Tuesday. 

Around 90% of the energy produced by the nuclear facility will go to power Google systems, per an early agreement between NextEra and Google. A spokesperson with NextEra said Tuesday that 50 megawatts of the energy generated at the plant will go to Central Iowa Power Cooperative, or CIPCO. 

Danly said that when more electricity is added to a system, it’s also beneficial to have a lot of load to serve, because more customers, like the big purchase agreement with Google, will help drive down the fixed costs of an electricity system.

“Every time you build a new facility to serve a new load, you have downward cost, downward price pressure on rates,” Danley said while speaking with reporters. 

A recently released report from Gov. Kim Reynolds’ Iowa Nuclear Energy Task Force listed nine recommendations for nuclear energy expansion in the state. Most of the recommendations centered on state action to expand nuclear energy by exploring or creating local incentives and workforce development options. 

The last several recommendations directed the state to coordinate with the federal government on nuclear incentives and programs and to “consider” the state’s role in managing spent nuclear fuel. 

When asked about long-term solutions for nuclear waste, Danly said the DOE hopes to “encourage” the reuse of “spent fuel” which he said has historically been deposited after just one fuel cycle. 

“The objective is not just to ensure that it’s safely stored, which is obviously the primary concern, but also that we get as much out of it as we can,” Danly said. 

NextEra has not said publicly the estimated total cost to bring Duane Arnold back online. Bolster said the company hopes to be “well inside” the $1.9 billion loan confirmed with the DOE. 

“You can gather from that loan sizing that we’re talking about multiple billions of dollars here to bring this plant back online,” Bolster said.