US backs revival of three nuclear plants to power AI data centres

The United States is financing efforts to restart three nuclear plants that entered permanent closure. The projects could expand carbon-free supply for data centres while intensifying safety and subsidy debates.Image used for representational purposes onlyNewyork,Oct 16, 2026 19:22 ISTThe United States is attempting to restart three nuclear power plants that had begun shutting down, as it seeks to meet rising electricity demand from large data centres and other industries, according to a report by news agency Press Trust of India.The US Department of Energy is lending up to USD 4.4 billion to revive the Palisades Power Plant in Michigan, the Crane Clean Energy Centre at Pennsylvania's Three Mile Island and the Duane Arnold Energy Centre in Iowa. Together, they could generate 2.25 gigawatts of electricity, enough to power about two million homes and businesses.No commercial nuclear reactor is known to have resumed generating electricity after entering the process of permanent closure, though some reactors have restarted after long outages. All three US plants closed before their licences expired, largely because the electricity they generated was considered too expensive.Two of the plants now have contracts with major technology companies willing to pay more for large amounts of carbon-free electricity for data centres. The Trump administration is also promoting nuclear power for artificial intelligence and manufacturing and lending billions of dollars for upgrades to increase output at operating nuclear plants. Nuclear engineering expert Todd Allen said restarting a reactor was a relatively quick and less expensive way to secure large amounts of electricity compared with building a new, large reactor. "There's a demand in the country for more power," he said. "You have these assets that were previously hooked up. They were previously operable, and you can relatively quickly get them generating electricity again, compared to your other possibilities. For anyone who wants zero carbon, nuclear provides that. For the Trump administration, which really wants nuclear, this fits that story also."Allen, associate dean for research at the University of Michigan's College of Engineering, compared the process with restarting a car that has been idle for several years. The driver still needs a valid licence and all the parts must work correctly. "That's what they're trying to do with these nuclear plants, but it's a much bigger, complicated system," he said. Plant owners must bring back nuclear workers, update their training and maintenance, check equipment, secure enough fuel and ask regulators to restore their operating licences. Allen said there was a lot to monitor, but the process was relatively straightforward.Edwin Lyman, director of nuclear power safety at the Union of Concerned Scientists, said taxpayer funds should be used to address safety risks. Most US nuclear plants were built between 1970 and 1990 and designed to withstand the natural disasters anticipated at the time, while climate change is making extreme weather more frequent and severe, he said. "It's possible, if they set the right level of safety and spend the necessary funds to meet that, they could restore these plants to operable condition," Lyman said. "That's not happening at this point."Duane Arnold, Iowa's only nuclear facility, began operating in 1975 and was scheduled to close permanently in October 2020. Replacing it with cheaper sources, including wind energy, was projected to save Iowa customers USD 300 million in energy costs. The plant closed early, in August 2020, after being damaged by a powerful storm known as a derecho.NextEra Energy, which owns Duane Arnold, plans to work with Google to restart the plant by early 2029. After assessing its condition, chief executive John Ketchum said officials "felt really good about the ability to bring it back". He added: "This is a perfect example of data centres paying their own way. We're able to sign a long-term contract with a hyperscaler for that project. So none of the costs are being paid by residential customers in Iowa."Palisades is the furthest advanced of the three projects. The plant operated from 1971 until 2022, when its owner, Entergy, left the nuclear power business, although its operating licence was valid until 2031. Holtec International bought the plant and began dismantling it, but none of the steps taken was irreversible.Michigan officials, seeking to retain nuclear jobs and electricity generation, encouraged Holtec to reopen the plant and provided state funding. The Biden administration approved a USD 1.5 billion loan in 2024 for the restart, and the Trump administration continued the payments.Holtec began loading nuclear fuel in August, one of the final major stages before a reactor can restart. It paused the process after a fuel assembly tilted from its upright position and the company decided to investigate the cause. Power purchase agreements require Palisades to begin operating by March 2027. Holtec said the project would restore a steady supply of electricity, strengthen energy security and demonstrate nuclear power's role in meeting growing demand.Microsoft has a contract with the Crane Clean Energy Centre at Three Mile Island, near Harrisburg. The site was the scene of the worst commercial nuclear power accident in the US in 1979. The accident destroyed one reactor and left the plant with one functioning reactor.In 2019, Exelon, then the parent company of Constellation Energy, closed the functioning reactor, saying it was losing money and Pennsylvania lawmakers had refused to subsidise it. Constellation announced in 2024 that it would spend USD 1.6 billion to restart the reactor under a 20-year agreement with Microsoft. It hopes to bring the plant back online in 2027. The Energy Department provided a USD 1 billion loan, and Deputy Energy Secretary James Danly toured the facility last week, the Press Trust of India report said.Jack Spencer, director of The Heritage Foundation's Centre for Energy, Climate and Environment, opposed the federal support. He said he could not think of a worse use of taxpayer money than restarting reactors, arguing that the projects were low-risk and faced strong demand for their electricity, leaving no reason to direct federal funds to the companies. Jennifer Gordon, who heads the Atlantic Council's Nuclear Energy Policy Initiative, took the opposite view, saying federal financing was an effective way to secure needed electricity.The World Nuclear Association said reactor restarts should be welcomed, though preventing plants from closing prematurely would be preferable. It expects Palisades to become the world's first nuclear plant to resume generating electricity after entering the permanent closure process. The association said reactors in Canada, Armenia, Belgium, Japan, India and South Korea had restarted or been refurbished after long shutdowns, while other countries were considering or pursuing similar projects.The three proposed restarts could therefore restore enough nuclear capacity to supply about two million homes and businesses, supported by federal loans and long-term technology company contracts, even as experts continue to debate safety concerns and the use of taxpayer funds.With PTI Inputs- Ends