NextEra Considers Restarting Iowa's Only Nuclear Plant as 'Next AI Trade' Gains Momentum

Revival of Dormant Nuclear Plants

Following the recent developments in the nuclear industry, such as the restart of the Three Mile Island nuclear plant near Harrisburg, Pennsylvania, the Biden administration's $1.5 billion loan to resurrect Holtec's Palisades nuclear plant in Michigan, and tech giants like Amazon, Microsoft, and Google investing in nuclear trade as the "next AI trade," the atomic era continues to gain momentum. Now, there is news about a potential restart of another dormant nuclear plant, this time in Iowa.

NextEra Energy's Earnings Call

During a Wednesday earnings call, NextEra Energy CEO John Ketchum informed investors about the company's consideration to restart the defunct 600-megawatt Duane Arnold Energy Center (DAEC), Iowa's only nuclear power plant. The plant is situated on the west bank of the Cedar River, approximately eight miles northwest of Cedar Rapids.

During the call, Ketchum addressed the company's position on nuclear and gas, stating, "As a top operator of all forms of power generation, we often get asked about nuclear and gas." He further elaborated on the role of nuclear power, mentioning some practical limitations and the need for an additional 900 gigawatts of new generation to the grid by 2040. He also revealed that the company is currently evaluating the recommissioning of the DAEC in Iowa.

DAEC's History and Challenges

The DAEC started operations in early 1975 and ran for several decades. However, in August 2020, a weather-related event damaged the facility's cooling towers, and it was decided that repairs would not be cost-effective. NextEra owns approximately a 70% stake in DAEC.

Analyst Dumoulin Smith from Jefferies expressed skepticism about the restart of DAEC due to the plant's damage and the region's robust wind generation. However, NextEra Energy President Rebecca Kujawa suggested that potential customers for DAEC could include two Fortune 50 customers, indicating a significant, broad-based demand.

Big Tech's Role in Nuclear Revival

The recent involvement of major tech firms in the nuclear industry and their efforts to revive it have provided a significant boost for the "Next AI Trade," which was identified as a long-term favorite trade in April. This trend has also opened up various investment opportunities for powering up America.

Recent coverage of the atomic revival includes news about nuclear names surging after the planned restart of Three Mile Island to power Microsoft data centers, Sam Altman-backed nuclear startup Oklo signing an agreement with the Department of Energy for the next phase of siting in Idaho, the US closing on a $1.5 billion loan to resurrect Holtec's Palisades Nuclear Plant, and Google turning to nuclear to power its data centers.

Looking Back

It's worth revisiting December 2020, almost four years ago, when the nuclear theme was first introduced to readers with the headline: "Buy Uranium: Is This The Beginning Of The Next ESG Craze."

Bottom Line

The recent developments in the nuclear industry, including the potential restart of Iowa's only nuclear plant, indicate a resurgence in the atomic era. With big tech companies investing heavily in nuclear trade, it seems like the 'next AI trade' is gaining significant momentum. However, the challenges and practical limitations associated with nuclear power cannot be overlooked. What are your thoughts on this resurgence of nuclear power? Feel free to share this article with your friends and discuss it. Also, remember to sign up for the Daily Briefing, which is available every day at 6pm.