NextEra "Evaluating" Restart Of Iowa's Only Nuclear Plant As 'Next AI Trade' Gains Steam
Following the news of the Three Mile Island nuclear plant restart near Harrisburg, Pennsylvania, and the Biden administration supplying a $1.5 billion loan to resurrect Holtec's Palisades nuclear plant in Michigan, along with Amazon, Microsoft, and Google all jumping on the nuclear trade via the "next AI trade," the atomic era continues blasting off with news that another dormant nuclear plant, this time in Iowa, is slated for a possible restart.
On a Wednesday earnings call, NextEra Energy CEO John Ketchum told investors that the company may restart the shuttered 600-megawatt Duane Arnold Energy Center (DAEC), Iowa's only nuclear power plant. It's located on the west bank of the Cedar River, about eight miles northwest of Cedar Rapids.
Earnings call...
DAEC began operations in early 1975 and operated for decades. In August 2020, the facility's cooling towers were damaged in a weather-related event, and repairs were deemed uneconomical. NextEra owns about a 70% stake in DAEC.
Jefferies analyst Dumoulin Smith told clients in a note that DAEC would be costly to restart...
The latest news from big tech firms diving into nuclear and reviving the industry provides a substantial tailwind for our "Next AI Trade" which we laid out in April as our long-term favorite trade, and where we outlined various investment opportunities for powering up America, playing out.
NextEra CEO ‘not bullish’ on SMRs as company assesses potential Duane Arnold restart
“There are only a few nuclear plants that can be recommissioned in an economic way,” and newer technologies like small modular reactors remain financially...
NextEra Energy continues to evaluate the possibility of reopening the Duane Arnold nuclear power plant in Iowa amid growing interest from data center companies, CEO John Ketchum told investors Thursday during a third quarter earnings call.
Duane Arnold's boiling water reactor could make it easier to restart and operate economically than other nuclear power plants, Ketchum said. New nuclear technologies like small modular reactors remain uneconomical, Ketchum said.
Nuclear will likely supply just a fraction of the 900 GW the U.S. needs to add by 2040 to keep up with demand, Ketchum said.
Despite the recent fervor among tech companies and investors about nuclear energy, Ketchum held that renewables and storage will likely play a greater role in meeting new energy demand for at least two decades to come.
“Nuclear will play a role, but there are some practical limitations,” he said. “There are only a few nuclear plants that can be recommissioned in an economic way ... But even with a 100% success rate on those recommissionings, we would still only meet less than 1% of that [new] demand.”
Equity analysts had anticipated that the company might announce a deal to restart the 601 MW Duane Arnold plant during the Thursday call despite potential challenges such as competition with robust regional wind resources, according to Jefferies Research Services. And although the expected announcement did not come, Ketchum said the plant could be among the few that could reopen and operate economically. The company is currently running engineering assessments and speaking with local stakeholders about what it would take to reopen the plant, he said.
But Ketchum said he was “not bullish” on the newer SMR technology. NextEra has an in-house team dedicated to SMRs, he said, but so far they have not drawn favorable conclusions about the technology.
“A lot of [SMR equipment manufacturers] are very strained financially,” he said. “There are only a handful that really have capitalization that could actually carry them through the next several years.”
Ketchum also raised questions about the availability of nuclear fuel in the United States, and noted that SMRs remain “very expensive” even as the cost of renewable energy continues to fall.
“We're prioritizing other generation resources at this time,” he said. “Renewables are here for the long haul.”
Ketchum also announced that NextEra had secured two framework agreements for the potential development of up to 10.5 GW of renewables and storage to be built through 2030. Although company executives said they were not yet able to identify which companies had countersigned the agreements, they described them as “Fortune 50” companies outside the tech industry.
New demand from data centers and tech hyperscalers amid an increasingly limited supply of new generation projects has put pressure on other industries that are also looking to secure renewable energy, Ketchum said. “All ships are rising with the tide here,” he said, “because they may be facing higher power prices down the road.”
The company reported a net income of $1.85 billion, compared to $1.22 billion in the third quarter of 2023.
History
1925
Florida Power & Light Company was created on Dec. 28, 1925. In the beginning, FPL owned power plants, water facilities, gas plants, ice companies, laundry services and even an ice cream business. In its first year, the company served approximately 76,000 customers in 58 communities and had a generating capacity of 70 MW.
1941-1945
At the beginning of World War II, 83 employees entered the armed forces. By its end, that number increased to 569 – one quarter of the company’s workforce. As a result, the company began hiring women to fill positions left vacant by labor shortages, including meter work, truck driving, auxiliary plant operation and mechanical work.
1944
The company’s efforts on the home front during World War II did not go unnoticed. On Feb. 1, 1944, Admiral W.R. Munroe, commandant of the Seventh Naval District of the United States Navy, presented FPL with the Citation for Meritorious Wartime Service.
1950
FPL’s stock was listed on the New York Stock Exchange. Overnight, the company acquired about 14,000 stockholders.
1966
The company’s customer count grew to one million.
1969
NASA’s Apollo 11 mission, where the first astronauts walked on the moon, was launched from Kennedy Space Center. FPL supported the effort by building the Cape Canaveral Plant and strengthening the poles and wires in the area.
1972
The first nuclear power reactor at Turkey Point started generating electric energy. This was the first nuclear reactor in Florida.
1974-1977
FPL finished construction of its first 500-KW power line. FPL became one of the few companies in the nation able to produce more than 10 million KW of electricity.
1985
For the first time in its history, FPL went a full day without burning oil. Instead, it relied on coal-fired power from Georgia, its four nuclear units and natural gas to meet customer demand.
1989
FPL became the first non-Japanese company to win the Deming Award, a prestigious award recognizing Quality. The award was the culmination of years and millions of dollars in investment toward the company’s Quality Improvement Program.
1992
FPL reported that its power plant emissions were “the lowest of any investor-owned utility in the state and are 70 percent lower than the national average for all utilities.”
1997
FPL Energy was established. It would later be renamed NextEra Energy Resources.
1998
The company’s first wind site, Vansycle Ridge Wind Farm, came online near Helix, Oregon.
2009
FPL Energy’s name was changed to NextEra Energy Resources to highlight the company’s growing role in the energy sector outside of Florida and continued commitment to exploring alternative energies.
2009
The company became the largest producer of wind and solar power in the nation.
2009
The company partnered with six Florida schools to develop Next Generation Solar Education Stations, which allow the school to produce emissions-free electricity while educating students on renewable energy and solar power. In the coming years, the company would develop additional Solar Education Stations at schools across the country.
2010
FPL Group changed its name to NextEra Energy, reflecting the company’s commitment to the environment and its expansion outside of Florida. The company is listed on the New York Stock Exchange as NEE.
2011
The Martin Next Generation Solar Energy Center was brought online. It was the first hybrid solar facility in the world to combine a solar-thermal field with a combined-cycle natural gas power plant.
2012
The company celebrated the commissioning of its 10,000th MW of wind energy.
2013
NextEra Energy completed the largest multi-state nuclear uprate project in U.S. history. The multi-billion dollar expansion at St. Lucie, Turkey Point and Point Beach involved six separate nuclear units.
2014
The company launched NextEra Energy Partners, a growth-oriented limited partnership to acquire, manage and own contracted clean energy projects with stable, long-term cash flows. At the time, it was the most successful IPO of its kind.
2018
FPL is in the midst of executing one of the largest solar expansions ever in the eastern U.S. with eight new solar energy centers brought online in 2018.
2019
FPL's Turkey Point becomes the first nuclear plant in the United States to get a license renewal for up to 80 years.
2020
FPL launches FPL SolarTogether, the largest community solar program in the U.S.
2020
FPL formally closed the Indiantown Cogeneration plant, its last coal-fired plant in Florida, ending its use of coal in the state.
2022
FPL completed its integration of Gulf Power, expanding service to northwestern Florida.
2022
NextEra Energy sets goal to achieve zero-carbon emissions by no later than 2045.
2022
NextEra Energy Resources, in partnership with Portland General Electric, commission the first utility-scale energy facilities in North America to co-locate wind, solar and battery storage, generating renewable power for customers. The Wheatridge Renewable Energy Facilities in Morrow County, Oregon includes 300 megawatts of wind, 50 megawatts of solar and 30 megawatts of battery storage.
2023
FPL’s first-of-its-kind clean hydrogen pilot project, the Cavendish NextGen Hydrogen Hub, in Okeechobee County, Florida begins producing hydrogen. Built with state-of-the-art technology, the hydrogen hub pilot project draws from Florida’s most abundant natural resources, solar energy, to produce clean hydrogen.