DOE Finalizes $1.9 Billion Loan for Duane Arnold Nuclear

The U.S. Department of Energy (DOE) has closed a loan of up to $1.9 billion to NextEra Energy to support restarting the Duane Arnold Energy Center in Iowa. The 615-megawatt nuclear plant, which shut down in 2020, is targeted to resume commercial operation in the first quarter of 2029.

Duane Arnold closed in August 2020 after 45 years of operation. It was shuttered following damage from a derecho wind storm, with officials partly deciding repairs were not economically viable. The restart is partly driven by demand from data centers, with NextEra holding a 25-year power purchase agreement to supply electricity to Alphabet's Google.

The DOE stated the project will create about 1,500 construction jobs and support more than 450 operational positions. The restart is one of three such efforts supported by the DOE's Office of Energy Dominance Financing, formerly known as the Loan Programs Office.

Baseload Generation

John Ketchum, chairman, president and CEO of NextEra Energy, framed the project as essential for meeting new demand. "Restarting Duane Arnold is about delivering new power to meet new demand while generating billions of dollars in economic value for Iowans," he said. He argued that adding generation for new demand helps keep power affordable for existing customers and strengthens the grid.

Deputy Secretary of Energy James P. Daily emphasized the value of reliable baseload power. In a statement, he said returning the 615 MW of generation would drive down electricity costs while supporting jobs. He described the move as part of a broader administration strategy to restart existing reactors, increase fleet output, and accelerate new construction.

Gregory A. Beard, head of the Energy Dominance Financing office, called Duane Arnold an investment that would help restore American nuclear leadership and strengthen energy security.

The Iowa plant joins other shuttered U.S. Nuclear facilities being considered for restart. These include the Palisades station in Michigan and Three Mile Island in Pennsylvania, now renamed the Crane Clean Energy Center. A $1 billion conditional loan commitment for Three Mile Island was finalized last November, with Constellation Energy and Microsoft suggesting a restart as early as next year. Financing for Palisades was finalized during the Biden administration.

NextEra Agreements

NextEra has signed definitive agreements to acquire the combined 30% interest in Duane Arnold held by Central Iowa Power Cooperative (CIPCO) and Corn Belt Power Cooperative. This transaction will make NextEra the plant's sole owner. NextEra stated that CIPCO will purchase output from the restarted plant under the same contract terms as Google.

Broader DOE Nuclear Financing

The DOE's support extends beyond restarting old plants. In June, the agency said it would commit up to $17.5 billion to help finance five projects aimed at accelerating the deployment of 10 large-scale commercial nuclear reactors in the U.S. Westinghouse will partner with utilities and energy companies to procure long-lead items at a fixed price for these projects.

Each new reactor project under this initiative requires significant upfront investment. Westinghouse and its partner for each project must each commit $500 million in equity, for a total of $1 billion per project, before accessing DOE loan funds. The projects would feature Westinghouse AP1000 reactors, each capable of producing 1.1 gigawatts of electricity. The DOE's goal is to have these reactors under construction by 2030.

The source for this report is POWER magazine.