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Released April 29, 2022 | SUGAR LAND
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Researched by Industrial Info Resources (Sugar Land, Texas)--Billions of federal dollars now available to keep aging and uneconomic nuclear power plants alive notwithstanding, Entergy Corporation (NYSE:ETR) (New Orleans, Louisiana) isn't deviating from its plan to exit the merchant nuclear energy market, even if that means the closure of its Palisades nuclear plant next month in Michigan.
On April 19, the U.S. Department of Energy (DOE) opened a certification and bidding process for a $6 billion civil nuclear credit program that is designed to subsize financially ailing nuclear plants as a way to maintain a carbon-free source of power. The initial funding is aimed at operational nuclear plants that have announced plans to close. For more information, see February 21, 2022, article - $6 Billion Program to Keep Financially Ailing Nuclear Plants Open is Now Seeking Applications.
Entergy's 800-megawatt (MW) Palisades Nuclear Power Plant in Covert, Michigan, certainly seems to fit the funding criteria. Entergy plans to shut down operations at the 50-year-old plant in May as part of its exit from the merchant nuclear power market to pursue more lucrative opportunities.
The bailout program, part of the bipartisan infrastructure bill that was signed into law by President Joe Biden last November, prompted Michigan Governor Gretchen Whitmer to write the DOE on April 19, saying the state will apply for the federal program's Civil Nuclear Credit by the May 18 deadline.
"Palisades is a nuclear facility in Southwest Michigan with a license to operate until 2031. The Covert Township union facility employs 600 workers making an average of $117,845, supports over 1,100 regional jobs, and generates $363 million in annual regional economic development. Palisades produces more than 800 megawatts of reliable, clean, carbon-free power," wrote the Democratic governor. The demise of Palisades would put a dent in her goal to cut greenhouse gas emissions by more than half by 2030 from a 2005 starting point and achieving carbon neutrality across the state's economy by 2050.
"Today, we have a new path forward to save Palisades, secure hundreds of good-paying jobs, empower regional economies, and help us fight climate change by generating clean energy," she continued.
She added the state of Michigan "has already had numerous conversations with the plant owner, and leading nuclear operators who may be interested in purchasing the plant and keeping it operational through its 2031 licensure date."
Entergy Chief Executive Officer Leo Denault did not seem quite as hopeful regarding Palisades' future.
"We are supportive of federal initiatives to keep nuclear plants operating," he said during the company's earnings conference call with industry analysts on Wednesday. "However, we are five years into the Palisades shutdown process--we are far down the path. There are significant technical and commercial hurdles to changing course at this point."
Upon its closure, Holtec International (Jupiter, Florida) would acquire the Palisades plant for decommissioning and demolition. For more on that project, subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here.
"That said, alongside Holtec, we will work with any qualified party that wants to explore acquiring the plant and obtain federal funding," Denault continued. "But I do want to be very clear; this does not change our strategy. Entergy is exiting the merchant nuclear business."
In any case, "the plant will have to stop operating in May because we haven't ordered fuel," Denault said. "There's a lot of work that would need to be done at the plant if it were to continue to operate beyond that cycle.... So it is a real heavy lift at the last hour."
Entergy reported earnings of $276 million for the just-ended first quarter, compared with $355 million in first-quarter 2021. The earnings decrease was driven largely by the company's shutdown of the Indian Point 3 nuclear reactor last year in Buchanan, New York, Entergy reported.
Industrial Info is tracking more than $10 billion in active project investments by Entergy. Subscribers can click here for a list of related reports.
Click on the image at right for a chart showing Entergy's project spending by type.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
On April 19, the U.S. Department of Energy (DOE) opened a certification and bidding process for a $6 billion civil nuclear credit program that is designed to subsize financially ailing nuclear plants as a way to maintain a carbon-free source of power. The initial funding is aimed at operational nuclear plants that have announced plans to close. For more information, see February 21, 2022, article - $6 Billion Program to Keep Financially Ailing Nuclear Plants Open is Now Seeking Applications.
Entergy's 800-megawatt (MW) Palisades Nuclear Power Plant in Covert, Michigan, certainly seems to fit the funding criteria. Entergy plans to shut down operations at the 50-year-old plant in May as part of its exit from the merchant nuclear power market to pursue more lucrative opportunities.
The bailout program, part of the bipartisan infrastructure bill that was signed into law by President Joe Biden last November, prompted Michigan Governor Gretchen Whitmer to write the DOE on April 19, saying the state will apply for the federal program's Civil Nuclear Credit by the May 18 deadline.
"Palisades is a nuclear facility in Southwest Michigan with a license to operate until 2031. The Covert Township union facility employs 600 workers making an average of $117,845, supports over 1,100 regional jobs, and generates $363 million in annual regional economic development. Palisades produces more than 800 megawatts of reliable, clean, carbon-free power," wrote the Democratic governor. The demise of Palisades would put a dent in her goal to cut greenhouse gas emissions by more than half by 2030 from a 2005 starting point and achieving carbon neutrality across the state's economy by 2050.
"Today, we have a new path forward to save Palisades, secure hundreds of good-paying jobs, empower regional economies, and help us fight climate change by generating clean energy," she continued.
She added the state of Michigan "has already had numerous conversations with the plant owner, and leading nuclear operators who may be interested in purchasing the plant and keeping it operational through its 2031 licensure date."
Entergy Chief Executive Officer Leo Denault did not seem quite as hopeful regarding Palisades' future.
"We are supportive of federal initiatives to keep nuclear plants operating," he said during the company's earnings conference call with industry analysts on Wednesday. "However, we are five years into the Palisades shutdown process--we are far down the path. There are significant technical and commercial hurdles to changing course at this point."
Upon its closure, Holtec International (Jupiter, Florida) would acquire the Palisades plant for decommissioning and demolition. For more on that project, subscribers to Industrial Info's Global Market Intelligence (GMI) Power Project Database can click here.
"That said, alongside Holtec, we will work with any qualified party that wants to explore acquiring the plant and obtain federal funding," Denault continued. "But I do want to be very clear; this does not change our strategy. Entergy is exiting the merchant nuclear business."
In any case, "the plant will have to stop operating in May because we haven't ordered fuel," Denault said. "There's a lot of work that would need to be done at the plant if it were to continue to operate beyond that cycle.... So it is a real heavy lift at the last hour."
Entergy reported earnings of $276 million for the just-ended first quarter, compared with $355 million in first-quarter 2021. The earnings decrease was driven largely by the company's shutdown of the Indian Point 3 nuclear reactor last year in Buchanan, New York, Entergy reported.
Industrial Info is tracking more than $10 billion in active project investments by Entergy. Subscribers can click here for a list of related reports.
Industrial Info Resources (IIR) is the world's leading provider of market intelligence across the upstream, midstream and downstream energy markets and all other major industrial markets. IIR's Global Market Intelligence Platform (GMI) supports our end-users across their core businesses, and helps them connect trends across multiple markets with access to real, qualified and validated project opportunities. Follow IIR on: LinkedIn.
