The present invention provides a system and method for reclaiming energy from the heat emanating from spent nuclear fuel contained within a canister-based dry storage system. The inventive system and method provides continuous passive cooling of the loaded canisters by utilizing the chimney-effect and reclaims the energy from the air that is heated by the canisters. The inventive system and method, in one embodiment, is particularly suited to store the canisters below-grade, thereby utilizing the natural radiation shielding properties of the sub-grade while still facilitating passive air cooling of the canisters. In another embodiment, the invention focuses on a special arrangement of the spent nuclear fuel within the canisters so that spent nuclear fuel that is hotter than that which is typically allowed to be withdrawn from the spent fuel pools can be used in a dry-storage environment, thereby increasing the amount energy that can be reclaimed.