An Iowa nuke plant may be the next to restart thanks to AI power demand

The Duane Arnold nuclear plant northwest of Cedar Rapids, Iowa is pressing ahead with plans to restart operations by the end of the decade after shutting down for economic reasons in 2020.

The plant is the third – and likely the last – mothballed reactor in the U.S. that is in shape to come back online to support growing electricity demand in the U.S.

Duane Arnold would follow similar restarts planned for the Palisades nuclear plant in Michigan and Three Mile Island in Pennsylvania, which plan to resume operations later this year and in 2027, respectively, subject to approval by the Nuclear Regulatory Commission.

The Federal Energy Regulatory Commission approved a request last week from NextEra Energy, Duane Arnold’s owner, to let the nuclear plant reconnect to the electric grid. NextEra sees Duane Arnold restarting operations by the fourth quarter of 2028 at the earliest, according to FERC filings.

“While a significant amount of work needs to be done before the facility could be restarted, FERC’s decision is another positive step in the process,” Neil Nissan, a NextEra spokesperson, said in a statement to CNBC.

Power purchase agreement

With big technology companies looking to feed more nuclear power on to the grid to fuel the electricity-hungry data centers they are building to train artificial intelligence, Florida-based NextEra is aiming to win a lucrative power purchase agreement to restart Duane Arnold. Three Mile Island, for example, is restarting with financial support from a power agreement with Microsoft.

“The recommissioning of Duane Arnold has received significant commercial interest from premier American companies,” Garrett Goldfinger, the NextEra executive in charge of the restart project, told FERC in a late July filing.

Duane Arnold would bring more than 600 megawatts of electricity back to the grid, equivalent to the electricity needs of more than 400,000 homes.

“If we’re successful in bringing Duane forward, that obviously creates a hot bed of data center activity around that facility,” NextEra CEO John Ketchum told investors on the company’s July earnings call.

‘Unicorn opportunities’

Duane Arnold, Palisades and Three Mile Island are three of the 10 U.S. reactors that closed over the past decade as nuclear power strained to compete against cheap natural gas and renewable energy.

Restarting these plants is the most concrete sign yet that the nuclear industry is coming back after years of financial struggles.

“These are unique opportunities because you don’t face the new build costs associated with nuclear,” Ketchum said on NextEra’s earnings call. “These are really unicorn-type opportunities.”

NextEra, the largest renewable power developer in the U.S., had previously divided up Duane Arnold’s grid connection among multiple solar farms that the company was developing in response to the demand in Iowa for lower cost electricity.

But the market last year started to shift back in favor of high-capacity nuclear power as the U.S. saw an…