State development corporation could help finance planned coal-fired power plant near Skwentna

The Alaska Industrial Development and Export Authority, or AIDEA, is looking at early-stage financing to aid devilment of a 400-Megawatt coal-fired power plant west of Skewentna, in the western Matanuska-Susitna Borough.

The plant is proposed by Flatlands Energy, which has been exploring coal resources in the area for several years. Flatlands holds coal leases on state-owned lands.

AIDEA’s executive director, Randy Ruaro, said the authority is looking to aid development of new coal-fired power during a press conference on energy issues held in early January by Gov. Mike Dunleavy. Ruaro acknowledged that the Flatlands project near Skwentna is one development AIDEA is looking at.

AIDEA is the state’s development finance corporation which is helping diversify the state’s economy by investing in infrastructure to aid mining along with oil and gas and other resources.

The authority also works in partnership with commercial banks to assist commercial real estate development.

Many people get the proposed coal project confused with the West Susitna road project, which is being led by AIDEA. The two proposal are not connected.

Although having a road would benefit construction of the coal plant it does not depend on the road, sources familiar with the project say. Chugach Electric Association’s Beluga power plant on the west side of Cook Inlet, for example, is “roadless,” having been built in the 1960s without a surface transportation link. Decades later there is still no road to Beluga.

What would be built to the power plant, if it is constructed, are the electrical transmission lines that would bring the new coal power to Beluga to connect with the existing “railbelt” electrical grid, along with a pipeline that would transport carbon dioxide, or CO2, extracted from the coal plant emissions to the existing Beluga gas field where the CO2 would be injected underground for permanent storage.

This is the most advanced of the “carbon capture” projects proposed for Alaska that have been aided by U.S. Department of Energy, or DOE, grants under former president Biden.

The University of Alaska Fairbanks is also working on the Skwentna area coal project with research on the economics of the coal plant with carbon capture as well as the technical feasibility of injecting and storing the CO2 in the Beluga gas field reservoir.

Another carbon capture project planned is on the North Slope where Santos, Ltd. is developing the new Pikka oilfield. Santos had a corporate policy of having Pikka being “carbon free” when it is in production through a combination of carbon credits purchased with forest owners and project to inject CO2 underground in an underused North Slope oil reservoir.

The U.S. DOE is also supporting the North Slope project, although new U.S. President Donald Trump may find a way to terminate it along with the Cook Inlet carbon capture project.

So far the economics of the Flatlands project, with the CO2 capture, look favorable, according to UAF. It appears the coal power generated and transported to Beluga would be less expensive than power generated with liquefied natural gas, or LNG, imported from outside Alaska.

Southcentral utilities are looking to import LNG to supplement natural gas from Cook Inlet gas fields, which are declining.