Nuclear Energy
Holtec Advances Palisades Small Reactor Construction, Shelves Planned IPO
Feds greenlight permanent excavation-support work for new units before broader approvals, as fuel loading moves the existing 805-MW Michigan nuclear plant closer to historic restart
Holtec International said Sept. 15 that federal regulators have cleared permanent excavation-support work for two planned small modular reactors (SMRs) at its Palisades nuclear power plant site in southwest Michigan, where the company is also moving the existing 805-MW facility to restart.
With U.S. Nuclear Regulatory Commission approval in hand, Holtec can install permanent walls needed to support the SMR excavations while the agency reviews its broader request for early construction work. The pending limited work authorization would cover additional site and foundation work before the agency issues a construction permit for the two new reactors.
Because the excavation-support walls will remain buried after construction, they fall within commission definition of permanent construction and required the exemption granted in late August. They will serve no function in the completed plants and will remain structurally isolated from safety-related structures after backfill.
Diaphragm walls, soldier-pile soil-mix walls and perimeter cutoff walls would stabilize deep excavations, protect adjacent structures and utilities and manage groundwater, according to the agency. Holtec said the approval also allows related excavation, dewatering and ground-improvement work for the nuclear island, turbine island and balance-of-plant structures.
Waiting for the broader authorization would “result in substantial costs” and negatively affect the construction schedule for the two small reactors, known as Pioneer Units 1 and 2, Holtec told regulators. The commission found that delaying the excavation-support work could also delay related excavation and potentially plant operations.
That head start carries regulatory risk. The agency said the exemption does not commit it to issue either the limited work authorization or a construction permit for the two reactors, leaving Holtec to assume the risk of proceeding before those decisions are made.
Excavation would proceed in stages, with bracing installed at successive levels and monitoring using inclinometers, piezometers, load cells and extensometers, according to agency documents. Because the walls will obscure subsurface geology, Holtec has agreed to photograph and survey exposed soils and rock as excavation progresses so those conditions can be compared with the project's subsurface model during later licensing reviews.
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Broader early construction remains subject to commission approval. The agency targets completion of its final safety evaluation and environmental impact statement by March 31, 2027.
Fuel Loading Moves Historic Restart Forward
Holtec began loading fuel into the existing Palisades reactor Aug. 30 after more than two years of inspections, maintenance, refurbishment, testing and equipment upgrades, the company said. Its 204-assembly core includes new fuel and partially used assemblies from the plant's final operating cycles before its 2022 shutdown.
“It's the first in a defined progression of plant operating modes as we advance through the remaining activities required for startup,” Nick Culp, Holtec senior manager of communications, told Michigan radio station WSJM.
Fuel loading puts Palisades into Mode 6, or refueling. The plant must progress through several more steps as systems are brought toward operating conditions (see sidebar).
The company says restart work has included steam-generator tube reinforcement, control-rod-drive mechanism nozzle replacement, reactor-vessel inspections and other repairs and upgrades. ENR reported in January that steam-generator work, turbine-generator reassembly and numerous remaining inspections had pushed back the restart schedule
No date has been announced for returning the plant, which began commercial operation in 1971, delivering power to the grid. A successful restart would make Palisades the first U.S. commercial nuclear reactor returned to operation after permanent shutdown.
Under an agreement with Hyundai Engineering & Construction, Holtec plans a 10-GW North American SMR fleet beginning with the Pioneer Units 1 and 2 at Palisades totaling about 680 MW. ENR previously reported estimated costs of $2.1 billion to $2.7 billion per reactor.
The U.S. Energy Dept. awarded Pioneer up to $400 million in cost-share funding last year. Holtec said in a statement at the time that the federal support was an “essential enabler” for moving the project from development to deployment. The company has targeted first power from Pioneer by 2030.
Investor Concerns, Market Sentiment, Stall IPO
Meanwhile, the Jupiter, Fla.-based company postponed its planned Sept. 16 initial public offering, citing market conditions. The privately held nuclear equipment manufacturer and services contractor had sought to sell 50 million shares at $15 to $18 each, potentially generating $750 million to $900 million in gross proceeds.
The offering's governance structure would have left Holtec founder and CEO Krishna “Kris” Singh firmly in control after the company went public. Company SEC filings show public investors would have received Class A shares carrying one vote each. A holding company controlled by Singh retained Class B shares carrying 10 votes each.
The company prospectus warned potential investors that the structure would allow the holding company to control shareholder decisions, including director elections and major corporate transactions. The structure gave some prospective shareholders pause, Barron's reported, citing an investor familiar with the offering.
The offering also arrived as the market for nuclear shares has weakened, with investors reassessing how much they are willing to pay for future power needs tied to data-center growth.
“Holtec's investment case is clearly tied to expectations for higher electricity demand from data centers,” IPOX Research Associate Lukas Muehlbauer told Reuters. He said energy demand has not disappeared, but investors are becoming more selective about how much they will pay for anticipated growth.
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Singh described the timing to the Financial Times as Holtec encountering a “perfect storm” with investor sentiment softened around artificial intelligence and data-center development. He said Holtec has other options to raise capital and could return to the IPO market in three to six months, depending on market conditions.
In a Sept. 17 statement, Holtec said it plans to continue the Palisades restart, develop the Pioneer SMR-300 project plan and expand its manufacturing footprint despite postponing the offering. The company said it will consider returning to public markets when it believes conditions are appropriate.