Britain · UK News Post
Well, that didn't last long. In 2020, NextEra Energy couldn't close the Duane Arnold Energy Center (DAEC) nuclear plant fast enough. Although the plant's license wasn't set to expire until 2034, the company cited unfavorable economics and shut down Iowa's only nuclear plant 14 years early. But now, NextEra is proudly touting a $1.9 billion loan guarantee from the U.S. Department of Energy (DOE) to restart the shuttered plant and bring 'reliable, around-the-clock energy to the regional grid.' According to the DOE, 'Returning 615 megawatts of reliable baseload generation will drive down electricity costs, while supporting thousands of American jobs.'
Energy economics haven't changed, but demand has. In 2018, natural gas and wind power had become so cheap and abundant in Iowa that even the DAEC's relatively inexpensive nuclear power couldn't compete in terms of price. The DAEC – located just northwest of Cedar Rapids, Iowa's second-most-populous city – was producing nearly 10% of the state's electricity. But without a supply contract, NextEra decided to shut it down in October 2020. A derecho damaged the plant's cooling towers in August 2020, forcing an emergency shutdown, and the plant never reopened.
U.S. natural gas prices remain low, and wind power is more abundant than ever, generating about 63% of the state's electricity. However, rising electricity demand—driven by AI infrastructure expansion—has forced utilities to pay higher prices. The primary reason NextEra wants to restart the DAEC is to provide power for Google's AI data centers. Google announced a $7 billion investment in Iowa, including a $576 million data center near Cedar Rapids. The company is also considering up to six additional AI data centers near the DAEC, which will sign a 25-year agreement to purchase power from the plant. Two former owners, Central Iowa Power Cooperative (CIPCO) and Corn Belt Power Cooperative, will sell their combined 30% interest to NextEra, who will then own 100% of the plant. While 50 MW will be reserved for CIPCO, most of the 615 MW will go to Google.
The restart is supported by a federal loan, making nuclear power viable again despite its past economic struggles. Google's regulatory-friendly location in unincorporated areas minimizes opposition risks. For investors, this is a long-term win for NextEra shareholders, though operational benefits won't be immediate—full operation is expected by early 2029. The DAEC's history shows how quickly energy dynamics can shift.
Source: The Motley Fool
