The proposed Terra Energy Center is a large-scale coal and carbon capture and storage (CCS) project planned for Alaska’s Susitna River Valley that is being marketed to power large energy consumers such as mines, data centers, and manufacturing throughout the West Susitna and Port Mackenzie . While presented as a modern energy solution, the project and path for development in the Matanuska-Susitna Borough, it raises significant questions about its cost, assumptions, environmental impact, and reliance on public funding.

 

Project Overview

The Terra Energy Center would consist of a coal-fired power plant that was originally quoted at 400MW , with an estimated 300 MW net output after carbon capture. The facility would capture carbon dioxide (CO₂) emissions and transport them through a 60-mile pipeline to be permanently stored underground in a depleted natural gas reservoir near Beluga. The estimated size of the plant was reported to have grown to 1.25GW in announcements published Spring of 2026.

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The project is proposed by Flatlands Energy Corporation, a Canadian company and subsidiary of Alaska Asia Clean Energy Corporation, on a coal lease located approximately 18 miles west of Skwentna in the ecologically sensitive Susitna River watershed.

To function, the project would require major new infrastructure, including:

• A 75-mile transmission line to connect to the Railbelt grid or Port Mackenzie Area

• The West Susitna Access Road for construction and access

• A CO₂ pipeline to transport emissions for underground injection

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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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The proposed Terra Energy Center raises significant concerns about the use of public funds to support private industrial interests. According to the EERC analysis, approximately 200 MW of the project’s 400 MW capacity (with an additional 100 MW dedicated to carbon capture operations) could be supplied to the proposed Donlin Mine project, effectively tying the power plant to large-scale industrial development.

At the same time, companies with direct financial interests in the project are actively supporting related infrastructure. Nova Minerals, a major investor in Flatlands Energy (owned by Alaska Asia Clean Energy Corporation), is also a strong proponent of the proposed West Susitna Industrial Access Road, a critical piece of infrastructure needed to construct and operate the project. Without a guaranteed market for its coal, the value of Flatlands’ lease depends heavily on these kinds of publicly supported developments.

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Public investment is already playing a central role in advancing the project. The University of Alaska Fairbanks received approximately $8.8 million in federal funding in November 2023 to study the project’s feasibility, and the FY2025 state budget proposes an additional $2.2 million in matching funds. Combined with the potential for billions in additional public spending on roads, transmission lines, and related infrastructure, critics argue this represents a pattern of using taxpayer dollars to underwrite private, for-profit development.

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Taken together, these factors raise serious concerns that the Terra Energy Center would rely heavily on public funding while primarily benefiting private companies, an outcome that risks becoming another costly and avoidable example of Alaska taxpayers subsidizing private industrial projects.

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Local and Regional Political Support

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. This DOE funding has since been made unavailable.

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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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In March of 2026, the Mat-Su Borough Assembly passed resolution RS 26-019 which would enter the Brough into a joint marketing effort for four parcels of land (totaling over 10,000 acres) looking to attract large energy consumers such as data centers, manufacturing, or mines. The resolution passed but was veto by the Mat-Su Borough Mayor before the veto was ultimately overridden. 

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Key Concerns

The Terra Energy Center faces significant technical and economic critiques, beginning with the underlying assumptions in its feasibility models. These models assume 95% carbon capture efficiency, despite limited real-world evidence that such performance can be consistently achieved. They also often exclude full lifecycle costs and rely on coal pricing assumptions that may be artificially favorable. The track record of carbon capture and storage (CCS) projects further raises concerns, as demonstrated by the Petra Nova project in Texas, which captured less than 30% of its emissions before shutting down, and the Kemper Project in Mississippi, where the CCS component never successfully operated despite a $7.5 billion investment.

 

Environmental and safety concerns add to these challenges, including the proposed CO₂ pipeline’s proximity to sensitive areas such as the Iditarod Trail and Susitna Flats Game Refuge, risks of groundwater contamination from both coal mining and CO₂ injection, potential seismic impacts from underground carbon storage, and threats to salmon habitat throughout the Susitna River watershed.

 

Carbon Capture and Sequestration for coal energy diverts funding away from renewable energy investments, and fails to address Alaska’s long-term energy needs. In addition, coal development has well-documented impacts in Interior Alaska, where existing and proposed coal mining and transport have raised concerns about increased air pollution, dust and particulate emissions, and impacts to local waterways, wildlife habitat, and subsistence resources that Interior communities rely on. Strategically, critics argue that CCS could divert funding away from renewable energy investments, fail to address Alaska’s long-term energy needs, and that, globally, only a small number of CCS coal plants exist, with limited success in achieving high carbon capture rates.

 

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

Politico Article on Announcement of Korea Investment in Terra Energy

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