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The U.S. will soon restart a shuttered nuclear energy facility for the first time ever, thanks to a federal loan announced this week (POLITICO Pro, subscription).

What’s going on: The Energy Department “announced a $1.52 billion loan guarantee to now-owner [of Palisades Nuclear Generating Station] Holtec International to return to service the plant in Covert, Michigan, that closed two years ago. The U.S. Department of Agriculture committed another $1.3 billion in an effort to cut electricity costs for rural electric cooperatives that will buy power from the plant.”

• The 51-year-old, 800-megawatt plant will be the first nuclear reactor in the U.S. to be reopened after closure.
• Holtec expects to get the plant back online by the end of 2025 (The Verge).

What it could mean: The Palisades reopening may be part of a new nationwide trend: the revival of shuttered nuclear plants.

• Last month, Microsoft agreed to buy power from a partially reopened Three Mile Island, tentatively set for a 2028 restart by owner Constellation Energy (Engineering News-Record). 
• And there’s talk of restarting the Duane Arnold Energy Center, Iowa’s only nuclear plant, which closed in 2020.

Why it’s important: The already strained U.S. electrical grid is likely to come under even more pressure as energy demand goes up in the next few years due to increased electrification, data center growth and greater use of artificial intelligence.

• In fact, the net demand increase is expected to be about 15% in the next few years, Department of Energy Deputy Secretary David Turk told reporters this week, according to POLITICO.

In related news: Fourteen of the world’s largest banks last week pledged to increase their financial support of nuclear energy (Financial Times, subscription).

Our take: “Nuclear is an essential source of clean baseload power that will help us realize a clean energy future,” said NAM Director of Energy and Resources Policy Michael Davin.

• “In order to maintain grid reliability, we need to continue to invest in traditional nuclear facilities as well as support the development of exciting technologies such as small module nuclear reactors and fusion energy.”