Are Coal-Fired Power Plants Still Viable?

The question isn't rhetorical. While most of the energy industry has spent the last decade racing toward renewables, a proposed coal-fired power plant in Alaska is quietly making the case that the answer — at least in some corners of the country — might still be yes.

Terra Energy Corporation, with backing from the Matanuska-Susitna Borough, is actively recruiting anchor tenants for a new coal-fired power facility in the West Susitna region. That detail alone is worth pondering for a moment. This isn't a legacy plant fighting to stay online — it's a proposed new-build coal project in 2024, seeking commercial commitments. In an era when utilities are retiring coal capacity by the gigawatt, that's either an anachronism or a genuine regional solution, depending on how you look at it.

The truth is probably more complicated than either framing suggests.

The West Susitna Project: What's Actually Being Proposed

The West Susitna coal power project centers on a resource-rich but infrastructure-sparse region of Alaska. Terra Energy Corporation is the developer, and the Mat-Su Borough — one of the fastest-growing regions in the state — is lending institutional support. The current phase of development is focused on securing anchor tenants, which in project finance terms means locking in large, long-term electricity buyers whose commitments make the project bankable.

Without anchor tenants, a project like this doesn't get financed. With the right ones, it becomes a fundable infrastructure asset that can attract debt and equity capital.

That's the critical inflection point the West Susitna coal power project is at right now. Everything downstream — permitting, construction timelines, employment projections — depends on whether Terra Energy can land those commitments.

Alaska's energy situation provides important context here. The state is not connected to the Lower 48's power grid. It operates largely in isolated regional grids, which means it can't simply import cheap natural gas power from the Pacific Northwest when demand spikes. Remote and rural Alaskan communities often pay electricity rates that would shock residents of Seattle or Denver — sometimes exceeding $0.50 per kilowatt-hour, compared to a U.S. average around $0.16. Energy independence and cost stability aren't abstract policy goals in Alaska. They're economic survival.

Why Anchor Tenants Are the Whole Ballgame

In large infrastructure development — whether it's a data center campus, a liquefied natural gas terminal, or a power plant — anchor tenants serve a function that goes well beyond revenue. They signal to capital markets that the project has real demand validation.

For the West Susitna coal-fired power project, potential anchor tenants might include large industrial operators, mining companies active in the region, or municipal utilities looking to lock in stable baseload capacity. The Mat-Su Borough itself, given its population growth and expanding infrastructure needs, could theoretically play a role in that demand picture.

The mining sector is worth watching closely here. The West Susitna region sits adjacent to significant mineral deposits, and large-scale mining operations are among the most power-hungry industrial users imaginable. A copper or gold mine operating at scale can consume electricity at rates comparable to a small city. If Terra Energy can align the power project's development timeline with a major mining operation's buildout, the anchor tenant problem could solve itself.

That kind of industrial symbiosis — power plant and mine developing in tandem, each deriving stability from the other — is precisely how remote resource-extraction economies have historically built energy infrastructure. It's not a new playbook, but it's a durable one.

Economic Stakes for the Mat-Su Borough

The Mat-Su Borough's involvement in this project makes strategic sense. The region has experienced sustained population growth, and growth creates electricity demand. More immediately, a large infrastructure project means construction jobs, supply chain spending, and a potential long-term commercial tax base.

Coal plant construction at meaningful scale — even a relatively modest facility by Lower 48 standards — represents hundreds of millions of dollars in capital expenditure. That money flows through local labor markets, equipment suppliers, engineering firms, and logistics operators. The downstream employment effects during operations, while smaller than the construction phase, are stable and typically well-compensated.

Local businesses that supply services to energy infrastructure — from welding contractors to environmental monitoring firms to catering operations for remote worksites — stand to benefit directly. For a borough that's geographically large but economically still developing its industrial base, a project of this scale can function as an economic anchor in its own right.

The counterargument is real, though: capital committed to a coal plant is capital not committed to alternatives. If natural gas, geothermal, or renewable-plus-storage solutions could serve the same demand at comparable cost and reliability, the economic case for coal weakens considerably.

The Regulatory and Environmental Gauntlet

No new coal-fired power plant in the United States gets built without running a formidable regulatory obstacle course. The Environmental Protection Agency's air quality standards, state-level environmental review processes, and federal permitting requirements for projects in sensitive ecosystems all apply — and Alaska's environment is nothing if not sensitive.

The permitting timeline alone could span years, and every delay adds carrying cost and investor uncertainty to a project that's already swimming against the current of national energy policy.

There's also the question of carbon. Coal is the most carbon-intensive fossil fuel for electricity generation, producing roughly twice the CO₂ per megawatt-hour as natural gas. With federal climate policy in flux but institutional investors increasingly applying ESG screens to infrastructure assets, financing a new coal plant carries reputational and regulatory risk that didn't exist a decade ago.

Terra Energy will need to make a compelling case not just to anchor tenants, but to lenders and insurers who have their own exposure to climate-related financial risk. That's a harder pitch than it used to be, regardless of the underlying merits of the project.

Coal's Future in Alaska — And What Actually Competes With It

Alaska has coal reserves. It has a power grid that's isolated from continental North America. It has communities and industries with serious baseload power needs. That combination creates a niche where coal-fired generation is at least arguable in a way it simply isn't in states with robust grid interconnection.

But the competitive alternatives are advancing. Cook Inlet natural gas has supplied Southcentral Alaska for decades, though the basin is maturing and supply concerns are real. Geothermal resources in Alaska are largely undeveloped but geologically promising. Renewable energy — wind in particular — is increasingly cost-competitive, though its intermittency remains a genuine challenge for industrial users who need 24/7 power reliability.

Battery storage and long-duration energy storage technologies are improving, but they haven't yet solved the problem of providing firm, dispatchable power for heavy industrial loads over extended periods. That gap is precisely where coal and natural gas retain their argument.

The honest truth is that for remote industrial power loads in Alaska, there's no obvious single alternative to coal-fired baseload generation right now — which is exactly why this project is worth taking seriously rather than dismissing outright.

The West Susitna coal power project will ultimately be decided not by national energy narratives, but by the hard math of megawatts, dollars per kilowatt-hour, and the risk tolerance of whoever writes the anchor tenant agreements. If Terra Energy can deliver reliable power at a price point that pencils out for industrial users, the project advances. If it can't — if renewables plus storage or a natural gas solution comes in cheaper with comparable reliability — the market will say so.

What the project already tells us is that energy policy debates often look very different from Anchorage than they do from Washington. For the communities and industries that depend on the Mat-Su Borough's economic trajectory, the West Susitna coal power project isn't a relic of the past. It's a live question about how a specific place powers its specific future.

That question deserves a straight answer — not a preordained one.

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