UAF study calls for a coal-fired power plant in Southcentral Alaska

A study from the University of Alaska Fairbanks recommends that a coal-fired power plant be built in Southcentral Alaska to generate electricity for the Railbelt.

State legislators have been considering measures to address a fast approaching shortfall of Cook Inlet natural gas, which provides the vast majority of Southcentral’s heat and power. Large-scale imported natural gas has been touted as a potential solution, but legislators learned last month that it will likely only start being available in 2030. Costs for consumers have been expected to increase substantially.

UAF’s feasibility study, published last week, assumes that a coal power plant would be built off the contentious West Susitna Access Road near proven coal seams. And it assumes the plant would be fitted with carbon capture and storage technology, or CCS, which would allow carbon dioxide emissions to be stored underground.

”This study concludes a new biomass-coal power plant with CCS in Southcentral is attractive and can deliver affordable, reliable, clean, long-term energy security,” the 86-page report says.

UAF was recently awarded a separate $11 million federal grant to determine whether coal-fired power with CCS could be considered environmentally friendly. That study would need $2.2 million in state funding approved by the Legislature to proceed.

Meanwhile, the National Renewable Energy Laboratory recently issued a report with a different conclusion for Southcentral Alaska’s energy needs. It appears “the least-cost option” would come from generating 75% of the Railbelt’s power from renewable sources by 2040, the report said.

The total cost to build and operate a 300 megawatt coal power plant with CCS over 30 years was estimated at around $6.1 billion, but costs could be reduced with federal subsidies. The Mat-Su plant was expected to take six to eight years to start operating once design work begins, the UAF study said.

Inspired by the study, the Mat-Su Borough Assembly on Tuesday passed a resolution 5-2 pledging support for “the development of a coal power plant” and “the development of infrastructure, including the West Susitna Access Road.” But the Assembly first voted 4-3 to strip the resolution of any mention of CCS because they didn’t want the borough’s support to pigeonhole a project into using CCS, Assembly member Bill Gamble said during the meeting.

“We’re not going to tell them how to do it,” he said.

The resolution in support of coal power and CCS was introduced by Assembly member Rob Yundt, who is running for a Wasilla state Senate seat against incumbent Sen. David Wilson, R-Wasilla. Both Yundt and Wilson are Republicans.

The UAF study noted that coal plants are already used to generate electricity in the Interior and to power the university itself. The study said that a coal-fired plant with CCS could deliver cheaper power than natural gas from Cook Inlet, partly because of generous federal tax credits available for carbon storage projects.

Last year, Gov. Mike Dunleavy introduced a measure to monetize carbon sequestration, but his legislation has so far failed to pass either the House or Senate. The UAF study references Dunleavy’s bill, and says that emissions from a coal plant could be stored in depleted natural gas reservoirs in Cook Inlet.

Critics of CCS say the technology is expensive, largely unproven, and that investment should instead be focused on developing more renewable power generation, like wind and solar.

Chris Rose, executive director of the Renewable Energy Alaska Project, or REAP, said he had not read the UAF report but he questioned the high costs and touted low-environmental impact of a new coal-fired plant in the Mat-Su. He said that a new plant would not help the region’s immediate energy needs.

“It’s certainly not going to help Southcentral Alaska in the short-term when we have a natural gas crisis,” he said.

Instead, Rose pointed to a major wind power project proposed outside Anchorage that developers say could provide 20% of the city’s power. He said it was “imperative” that utilities invest in renewable energy projects like that to displace the use of natural gas, and to forestall the need to import LNG.

Currently, around 80% of Railbelt power is generated from Cook Inlet natural gas, which provides heat and power to the three-quarters of Alaska residents who live on the road system between Homer and Fairbanks.

Bills being considered to address the natural gas shortfall include royalty reductions on new gas production; tax credits for new gas rigs, and the elimination of tariffs charged by utilities to transmit power along the Railbelt grid, with a goal to lower costs for customers.

A measure proposed by Sutton Republican Rep. George Rauscher would implement clean energy standards for Alaska’s electrical utilities, with plans to get to 60% renewable power by 2051. Coal and nuclear power would be considered “clean” under Rauscher’s bill.

Utilities would not be penalized for missing renewable energy targets, but they would get tax credits for investing in renewable energy that could be bought and sold. Rauscher, chair of the House Energy Committee, said the bill was intended to be “technology agnostic” while incentivizing a greater diversity of sources of power.

A recent report from the Denver-based National Renewable Energy Laboratory said that getting to 75% renewable energy on the Railbelt by 2040 could be the lowest-cost option for Southcentral. The study estimates that $100 million in annual savings could be realized if that 2040 target was met, compared to a scenario of no new renewable energy investment.

Last year, the state was awarded a $206 million federal grant to modernize the Railbelt’s electrical grid, partly to better integrate renewable energy production. Legislators are still debating how to fund that grant, which requires a dollar-for-dollar match from the state over several years.

Anchorage independent Rep. Calvin Schrage, who sits on the House Energy Committee, has previously supported legislation with stricter renewable energy targets for electrical utilities. He said he was open to hearing more about a coal power plant with CCS, but he remained skeptical.

“Is that going to solve our energy crisis in Southcentral? I don’t think so. I don’t think the technology is there yet. I don’t think it’s proven out,” he said, adding that lawmakers should focus on concrete renewable energy projects like wind, solar and hydropower.

Rauscher said the clean energy standards legislation bill would be heard again in his committee next week with a goal to advance it to the House Finance Committee. It would need approval from the full House before heading to the Senate for consideration.

Reporter Sean Maguire reported from Juneau and reporter Amy Bushatz reported from the Mat-Su.