Overview

The proposed Coal and Carbon Capture and Storage (CCS) Project, named in early 2025 as the Terra Energy Center, would be a new 400MW coal project that captures carbon emissions (CO2) and transports it through a 60-mile pipeline to be injected underground permanently at a depleted natural gas field in Beluga. The coal plant would be built by Flatlands Energy, a Canadian company and subsidy of Asia Alaska, on their coal lease located 18 miles west of Skwenta in the ecologically-rich Sustina watershed in the Susitna River Valley.

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A Project Promoted on Assumptions

A cost feasibility report funded by the Energy & Environmental Research Center (EERC) in N. Dakota in the guise of a UAF (University of Alaska Fairbanks) study excludes the significant costs of building 75 miles of transmission lines and the contentious West Susitna Industrial Access Road, which the project adds on as a necessity for access to the plant. The report assumes the power lines that would connect the coal plant to the existing grid will be paid for by electricity consumers or ratepayers, and that the West Su Access Road (estimated to cost $450 million) will be paid for by DOT and/or AIDEA.

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The report only compares overly optimistically low coal prices to unrealistically inflated prices of natural gas, instead of comparing it to cheaper options such as solar and wind. A recent National Renewable Energy Laboratory (NREL) cost study released in March of 2024 found that the most cost-effective way to move forward would be to invest mostly into wind and solar projects for the next decade and a half. Erin McKittrick, Homer Electric Association (HEA) board director, shares a more realistic cost comparison that shows how this project will end up costing more than natural gas even with costly imported liquified natural gas (LNG) rates.

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The EERC report also fails to include the actual cost of the entire 30 year lifespan project after the current 12 year deadline of these tax credits. Without the extension of these tax credits, the project would be unaffordable.

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State-Funded Project Profiting Private Entities

The EERC report mentions 200MW of the 400MW (with 100MW powering the carbon capture) generated by the coal plant could go towards the proposed Donlin Mine project. Nova Minerals, a major investor in Flatlands Energy (owned by Alaska Asia Clean Energy Corporation) is also one of the companies strongly advocating for the West Su Industrial Road. Flatland Energy's coal lease holds little value without a buyer for the coal, and this project also brings the benefit of publicly-funded infrastructure supporting their for-profit operations. This $4 billion project is bound to be another Alaskan boondoggle, and yet another appalling example of the public paying for private profit and benefit.

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Where it Stands Now

The UAF (University of Fairbanks Alaska) received a $8.8 million federal infrastructure grant to research the costs and viability of the project in November 2023. The current capital budget (FY2025) proposes matching $2.2 million state funding to match the grant. ​

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The Mat-Su Borough Assembly passed a resolution (RS 24-031) that supports the coal and carbon capture project along with the building of the West Su Industrial Access Road on March 5th, 2024. Although there was strong public opposition with convincing points against the project during the meeting, the Assembly still voted to support the project and even removed the carbon capture piece through an amendment. 

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In early 2025, representatives of Terra Energy visited local decision-makers in Anchorage and the Valley including the Alaska Energy Authority, The Matanuska Electric Association Board of Directors, the Mat-Su General Assembly, and the Willow Community Council. In these visits, Terra asked for these organizations to provide a letter of support to be submitted with their application for a DOE’s Office of Clean Energy Demonstrations (OCED) grant intended to fund carbon capture and sequestration projects. Terra indicated that they will apply by March 1st for a Topic Area 1 award which will fund 1–3 projects with $175M – $400M, totaling a max of $750M across all projects. 

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Flatlands Coal filed for a Coal Exploration Permit in February of 2025 to allow the drilling of up to 12 exploratory drill holes on the lease. These holes are per their application are primarily for hydrological monitoring of ground water sources. The holes can also be used to gather geological core information and drilling is set to happen primarily in 2025 supported via helicopter.​

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Resources:

Nat Herz Article in Northern Journal, 12/27/23. “Could a new Alaska coal power plant be climate friendly? An $11 million study aims to find out.”

UAF proposal for project to DOE University of Alaska’s application to DOE 

DOE Grant Announcement Biden-Harris Administration finds 16 CCS projects with $444 million

Energy and Policy Institute Article about Project Tundra, a Coal CCS project in N. Dakota

CCUS Report in Alaska: Techincal Considerations and Governance Opportunities by the Nature Conservancy

Erin McKittrick's cost study on her Alaska Energy Blog

Dermot Cole’s article on the EERC/U of N. Dakota study

OCED Point Source Notice of Funding Opportunity Guidelines

Coal Exploration Permit Application filed by Flatlands Coal in February 2025

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