NextEra Energy secured a $1.9 billion loan from the U.S. Department of Energy to finance the rehabilitation of the Duane Arnold Energy Center nuclear plant in Iowa, paving the way for its restart in 2029. Google announced last October that it intended to support reviving the plant, which has been shut down for years, while reports indicate that it is considering building up to six data centers nearby.
The loan represents the second major U.S. government financing for restarting a shut-down nuclear plant, following a $1 billion loan granted last year to Constellation Energy to restart a reactor at the Three Mile Island plant. This indicates that reusing existing nuclear facilities has become part of a broader push to provide stable electricity to technology companies, alongside the rapid expansion of artificial intelligence data centers.
A Smaller Plant, but One That Can Be Restarted
Duane Arnold has been offline since 2020, after a severe rainstorm caused damage to the facility. NextEra decided at the time to retire it rather than repair it, when an abundance of cheap natural gas made nuclear power less economically attractive.
During the rehabilitation work, the company intends to increase the plant’s capacity by about 14 megawatts, bringing its total capacity to 615 megawatts. NextEra CEO John Ketchum said in an earnings call last year that 50 megawatts would be allocated to the local electric cooperative. According to the figures cited in the source, this amount represents 18% of Iowa’s growth in electricity demand since 2021, approximately one year before ChatGPT was launched.
James Danly, the deputy secretary of energy, said that restarting the plant would reduce electricity costs, but he did not provide details in the cited statement explaining how this reduction would occur or how it would be distributed among consumers.
Why Does This Matter?
The deal comes at a time when estimates cited in the source project that electricity consumed by the data center sector could approach three times its current level by 2035. This makes shut-down nuclear plants a relatively attractive option for technology companies and grid operators, as they may provide substantial, low-emissions generating capacity without waiting to build an entirely new plant.
Other companies are moving in the same direction. Microsoft reached an agreement with Constellation Energy to restart an 835-megawatt reactor at Three Mile Island, which is scheduled to resume operations in 2028. Meta also helped support the continued operation of the Clinton Clean Energy Center in Illinois by purchasing all the clean energy attributes from the 1.1-gigawatt plant, while the electricity itself is sent to the local grid.
Limits to Rapid Nuclear Expansion
The success of these deals does not mean that every shut-down plant can be revived at the same speed. The three plants mentioned—Duane Arnold, Three Mile Island, and Clinton—are considered among the relatively easiest cases to restart in the United States. There may be no more than one or two additional candidates, according to a report cited by the source, because facilities such as San Onofre in California have been offline for longer and require more extensive work.
The current announcement also confirms the financing, rehabilitation plan, and target date, but it does not clarify the project’s full final cost or the details of Google’s final agreement to purchase the electricity or the timeline for building the potential data centers. As a result, the practical impact on electricity prices and the allocation of power between Google and local consumers remain issues requiring follow-up.