The US Department of Energy (DOE) has announced a $1.5bn loan to Holtec to restart the Palisades nuclear plant in Covert, Michigan.

The conditional finance, provided through the DOE's Loan Programs Office, will restore the 800MW electric nuclear generating station.

The plant, which ceased operation in May 2022, is set to produce baseload power until at least 2051, subject to receipt of licensing approvals from the US Nuclear Regulatory Commission (NRC).

US Secretary of Energy Jennifer Granholm stated: “Nuclear power is our single largest source of carbon-free electricity, directly supporting 100,000 jobs across the country and hundreds of thousands more indirectly.

“President Biden’s Investing in America agenda is supporting and expanding this vibrant clean energy workforce here in Michigan with significant funding for the Holtec Palisades nuclear power plant.”

Holtec, which acquired the power plant in June 2022, is poised to become the first company in the country to restart a nuclear plant successfully.

The company’s application for federal loan funding to repower Palisades was submitted in early 2023.

This application underwent a comprehensive review by the DOE and third-party advisors, assessing credit, financial, legal, market, regulatory and technical aspects.

Holtec applied to begin the process of federal reauthorisation with the NRC in October 2023.

The DOE's conditional commitment to Holtec is subject to final approval, contingent upon meeting specific loan-closing requirements.

The restart initiative has also garnered significant financial support from the state of Michigan as well as the federal loan. Holtec is also contributing capital investment to the programme.

In July 2023, Michigan's Governor, Gretchen Whitmer, allocated $150m to support the plant's restart in the state’s fiscal year 2024 budget.

In September, Holtec signed a long-term power purchase agreement with the Wolverine Power Co-operative and Hoosier Energy, two not-for-profit rural electric cooperatives, to sell Palisades’ power output.

The repowered Palisades nuclear plant will supply 800MW of greenhouse gas emissions-free electricity.

Holtec president and CEO Dr Kris Singh said: “This is a triumph for the United States in our collective pursuit of a clean and dependable energy future. We applaud the visionary leadership of the Biden-Harris administration, Secretary Granholm, director Shah and the department staff for seizing this historic opportunity and once again demonstrating America’s role as a global energy leader.

“The repowering of Palisades will restore safe, around-the-clock generation to hundreds of thousands of households, businesses and manufacturers. It also confers the environmental and public health benefits of emissions-free generation, hundreds of high-paying local jobs with a large union workforce, economic growth and the social benefits of a strong community partner.”