COVERT TOWNSHIP, Mich. – As a study in troubled operation, the Palisades Nuclear Plant once was ranked by the federal government as one of the four worst-performing nuclear power stations in the country. The 51-year-old facility closed in 2022, joining Big Rock Point near Charlevoix and 11 other nuclear plants decommissioned outside Michigan in what appeared to represent the sunset of the era of splitting atoms to produce electricity.

Not so fast. Sometime in the next few months a New Jersey-based company called Holtec International is expected to finish renovating Palisades, fire up the old reactor, and add 800 megawatts of generating capacity to Michigan’s electricity supply. It would be the first time a decommissioned nuclear plant has ever restarted in the United States. 

And that’s not the only game-changing nuclear development occurring at the Palisades site along the Lake Michigan shoreline in the state’s southwest corner. Holtec is busy seeking permission from the Nuclear Regulatory Commission, the federal licensing and safety agency, to start construction for a new 680-megawatt nuclear generating station next door to the old reactor. The company wants to power the new plant with not one but two 340-megawatt advanced small modular reactors. 

So-called “SMRs” are now viewed by the industry, government, utilities, and big energy consumers as one of the go-to electrical generating technologies of the 21^st century. Holtec’s planned Pioneer I and II small reactors, and its Palisades reactor restart, signal the opening of a new era of electrical supply and demand in the Great Lakes basin. 

Holtec’s commitment to nuclear power, like other developers in the U.S. nuclear sector, is motivated by several converging and unconfirmed projections that are prompting billions of dollars in investment. By far the most important are that the cost of building nuclear plants will fall, and that demand for electricity will significantly increase. Nuclear developers and utility executives have embraced both optimistic scenarios, especially that electrical demand could increase as much as 50 percent by mid-century, driven by data center construction, new manufacturing plants, growing cities, and electrified transportation. Both of Holtec’s projects in Michigan, and several more developments by other companies in Wisconsin, Ohio, Illinois, and Ontario, are giving nuclear power new purchase in the region’s energy landscape.

One of the most influential supporters is Michigan Gov. Gretchen Whitmer, who is positioning Michigan at the lead of the nuclear revival era. She declared in a statement that opening Palisades and adding the SMR plant “will lower energy costs, reaffirm Michigan’s clean energy leadership, and show the world that we are the best place to do business.” 

Related:

• The energy boom is coming for Great Lakes water. Is Michigan ready?
• Tensions mount as data centers eye ‘sleepy’ Michigan farm towns
• Anti-nuclear groups file suit against Palisades restart in southwest Michigan

Gov. Whitmer signed legislation in 2023 mandating that 100 percent of the state’s electricity come from “clean power” sources, among them nuclear energy. Michigan awarded Holtec $300 million to restart Palisades, a portion of the public funding package that included $1.52 billion in loan guarantees from the U.S. Department of Energy. The Energy Department also awarded Holtec $400 million more to develop the new SMR plant. 

A study of SMR development by the Department of Energy in 2023 found that construction costs for the first plants, like the one Holtec is planning, will be high because of limits on the supply chain providing parts, construction experience, and unknown interest rates for financing. At current estimates of SMR construction costs of $12 million to $15 million per megawatt, Holtec’s 680-megawatt plant could be put into operation at a cost of $7 billion to $10 billion.

Michigan’s bid to stimulate new markets for nuclear energy, moreover, are still dogged by old concerns about safety, waste management, and the cost of construction and operation. Three public interest groups filed a federal lawsuit in November asserting that opening the old Palisades reactor was illegal and unsafe. The case is pending in Federal District Court in Grand Rapids.

Safety, cost, waste addressed

By any measure, managing high-level radioactive waste from commercial reactors has not changed much in the last half century and persists as an issue because no permanent waste repository has been established in the U.S. But other considerations of the risks, benefits, and cost of nuclear power are tilting in new directions, especially for SMR plants like the one Holtec is proposing in Michigan. 

SMR developers make a consistent case for proceeding with the new technology. 

Water consumption looks to be an environmental advantage, particularly in water-abundant regions like the Great Lakes. Holtec’s environmental statement filed with the NRC reports that the two reactors will draw 25,000 gallons a minute for operation, as much as 36 million gallons a day. At that rate the new plant, which is 15 percent smaller than the existing Palisades plant, will withdraw 75 percent less water. 

Because of its more compact 123-acre footprint, the new Holtec plant would easily fit onto the 438-acre site that already encompasses the existing reactor. It will transmit electricity with the existing powerlines and infrastructure. And like other commercial reactors, SMRs don’t discharge climate-warming gases, a big factor in why nuclear power has gained considerably more support in public polling in recent years.

When it comes to operational safety, Holtec and other SMR plant developers say their designs also answer that concern. The advanced modular reactors are smaller and contain less fuel, produce lower levels of radiation, and can operate at a lower temperature and pressure than big conventional reactors. Those properties enable engineers to design a reactor that can be cooled with water or air, and can be shut down with gravity-fed systems that don’t rely on mechanical pumps. 

“When it comes to safety the question is, ‘How do I keep this cool?’” said Brendan Kochunas, associate professor of nuclear engineering at the University of Michigan. “And that comes back to the amount of fuel that you have in the core. SMRs have smaller cores. There’s less heat being produced so you need to remove less heat.”

Industry executives assert that because the reactors are smaller than conventional 1,000-megawatt plants, they will require fewer construction materials, take fewer years to build, and be less expensive to operate. Industry executives say their goal is to standardize designs so that parts can be manufactured and new reactors can be assembled and shipped on trucks or by rail.  And because SMR plants have multiple reactors, one can be shut down for maintenance while the others continue operating. 

“In discussions we’ve had about small modular reactors, there may be lower upfront costs and potentially faster deployment because you don’t have quite as much concrete,” said Scott Burnell, the spokesman for the NRC in an interview. “And once you get into operation, the concept is you’ve got several small reactors running. If you bring one down for maintenance, you still have others running, generating profit.”

Race for orders

Holtec is competing with 30 other SMR developers in the U.S. to be among the first to bring its reactor to market. Patrick O’Brien, the Holtec spokesman, explained that the company has spent 15 years designing the SMR-300, preparing architectural plans for the generating station, and keeping the NRC informed of its activities. Though the SMR-300 has not received an operating license, O’Brien said Holtec is confident it will be approved and the plant would be operating in 2032. “A lot of the work was done up front,” he said. “We’re anticipating two and a half more years’ worth of licensing work from the NRC. And two and a half years of construction.”

That’s an optimistic schedule for new nuclear plants. NuScale, an SMR designer based in Oregon, licensed its first 66-megawatt reactor with the NRC in 2023. It has yet to build a new plant. NuScale’s first project to install seven SMRs at a 462-megawatt plant in Idaho collapsed after construction cost estimates increased from under $4 billion to more than $9 billion. 

The NuScale experience reveals that uncontrolled costs are a primary impediment not just for big traditional reactors but also to SMR development. SMRs don’t exist in North America or Europe, and just three SMRs operate in the world – two 35-megawatt reactors operating on a ship in Russia and a third 125-megawatt SMR in China. “One always has to remember that these are experimental technologies,” said Joseph Romm, a physicist and senior research fellow at the University of Pennsylvania. “Both the Russian and Chinese reactors had huge cost overruns.”

According to an important study published last year by the University of Michigan, SMRs also may produce new environmental risks that could attract more review. Small reactors, for instance, have the potential to introduce new and unregulated byproducts and increased levels of radioactivity due to the demand for highly enriched uranium fuel, according to the report, “The Reactor Around The Corner.” 

Another likely environmental risk is deploying small reactors to power big industrial projects in the world’s wild and undeveloped places. SMRs pack a lot of energy into a small and portable power source, said the report’s authors, who projected that the small reactors will enable construction of big mines and industrial plants in terrain that has been too expensive to reach or entirely inaccessible. “SMRs will introduce and exacerbate direct and indirect environmental harms, especially on marginalized communities, that complicate the justification for using them to mitigate climate change,” they wrote.

Midwest familiarity with atomic technology 

To date, elected leaders and residents in Michigan and the other Great Lakes states have responded to the opening of a new era of nuclear development with much more enthusiasm than alarm. That may be due principally to the region’s pioneering role in fostering atomic energy. The first nuclear chain reaction occurred at the University of Chicago in 1942. Argonne National Laboratory opened in Illinois in 1946 to serve as the center of atomic research and technology development. The Shippingport Atomic Power Station in Pennsylvania opened in 1957 as the first commercial nuclear generating station.

Not since the height of commercial nuclear energy construction in the 1960s and 1970s have Great Lakes states seen such a concentration of new nuclear projects either underway or planned. The Palisades restart would push the number of operating nuclear reactors in the eight states to 24, second only to the more than 30 big reactors operating in the six Southeast states. 

More big reactors could be on the way. DTE Energy notified the NRC last year that it is actively studying the development of a new reactor at its Fermi Nuclear Generating Station south of Detroit along Lake Erie. 

SMR plants, too, are attracting attention in the Great Lakes basin. Ontario Power Generation is constructing a 1,200-megawatt plant, composed of four 300-megawatt SMRs, at its Darlington Nuclear Generating Station along the shore of Lake Ontario. It could be the first operating commercial SMR plant in North America. 

Utah-based EnergySolutions is proposing to build “new nuclear generation” along the Lake Michigan shoreline in Wisconsin at the Kewaunee Power Station, which closed operation in 2013. Oklo Inc., a California company, is proposing a SMR reactor in Portsmouth, Ohio, where a closed federal plant once enriched uranium for nuclear weapons. The University of Illinois notified the NRC that it is developing a gas-cooled SMR research reactor at its campus in Champaign-Urbana. 

The surge of interest is the second time this century that utilities, government, and investors have tried to revive nuclear power in the U.S., and is driven by many of the same factors. One is federal policy to promote nuclear projects. The second is a tide of government financing that can be traced back to 2021 when President Biden signed the $1.2 trillion Infrastructure Investment and Jobs Act that directed $8 billion to nuclear energy. Three years later Biden signed the ADVANCE Act to make it easier and less expensive for nuclear plant developers to license their designs with the NRC.

President Trump also supports nuclear energy. He signed four executive orders in 2025 to accelerate the deployment and integration of advanced nuclear reactor technologies, and directed federal agencies to take aggressive action to build a nuclear production industry to mine and enrich uranium and construct manufacturing plants to fabricate fuel, reactors, and parts. Earlier this month, the Department of Energy exempted SMRs from National Environmental Policy Act review. 

Westinghouse late last year signed an agreement with the U.S. government to build ten 1,000-megawatt reactors in the U.S. That agreement is tied to the pact that President Trump reached with Japan last October to finance $332 billion “to support critical energy infrastructure in the United States” including the construction of ten Westinghouse AP1000 reactors and SMRs. The president also wants to develop the capacity to recycle nuclear fuel to reduce highly radioactive waste. 

Trump’s goal is to quadruple electrical generation capacity from nuclear power from 97 gigawatts today, powered by 94 operating reactors, to 400 gigawatts by 2050.

In the last five years Congress has enacted more than $20 billion in direct appropriations for nuclear energy programs, along with tax credits and federal loan authority that add billions more in federal support for existing and advanced reactors. 

U.S. technology giants like Amazon, Google, Meta, and Microsoft also are getting involved. 

Company executives are establishing formal agreements with nuclear developers to build and buy power for their data centers. Meta, for instance, has an agreement with Oklo Inc. to build a proposed 1,200-megawatt SMR plant in Ohio. The high-tech stalwarts also joined 14 major global banks and financial institutions, 140 nuclear industry companies, and 31 countries in signing a pledge last year in Texas to support tripling global nuclear capacity by 2050.

Just marketing?

The big unknown is how much of this fervor is grounded in reality, and how much is hype and marketing. During the last attempt to revive nuclear energy in the U.S., from 2007 to 2010, the NRC counted over 20 nuclear plant proposals to review. But the heat of atomic hope quickly cooled as fracking started to produce ample supplies of natural gas, and much less expensive wind and solar power was gaining momentum. Just two new reactors that started construction during that period actually got built and began operating at Georgia Power’s Plant Vogtle. It took the utility 15 years to finish the project in 2024 at a cost of more than $30 billion. 

“Some vendors are overselling the vision,” said Kochunas of the University of Michigan. “I hope we do see some SMRs. They still have challenges in their economics. For it to succeed, one of these companies is going to need to establish a pretty substantial order book.” 

Could that be Holtec? 

“Yes,” Kochunas said. “I think they’ll get that built in Michigan. If they execute the project successfully, they will have opportunities to build more of them. Hopefully, you’ll see people lining up to get them. But if the execution of the project goes poorly and there’s significant delays and cost overruns and problems, it’s going to be hard to change that first impression.”

Thank you to our Michigan Environment Watch sponsors

Bridge Michigan Environment Watch is made possible by generous financial support from our sponsors. Sponsorship supports our independent journalism mission but does not constitute sponsor endorsement of individual articles or editorial content. Bridge Michigan journalism remains fact- and data-driven and independent at all times.

Please visit the About page for more information and to subscribe to Environment Watch. Interested in becoming a sponsor? Contact Emma Carr.

Republish This Story

Republish our articles for free, online or in print, under our Republication Guidelines. Questions? Email republishing@bridgemi.com