Alaska may build the first large coal-fired plant in over a decade and is considering "probably two" equipped with carbon capture and storage technology, Gov. Mike Dunleavy said.

Alaska is constructing roads into remote mining areas, and they will need power, Dunleavy told S&P Global Commodity Insights on the sidelines of CERAWeek 2024 by S&P Global in Houston. Situating new coal plants near Alaska's coalfields could significantly reduce costs while meeting other power needs, Dunleavy added.

"You place the plant right on the coalfield, and right on the coalfield is where the main transmission line for the entire Railbelt is," Dunleavy said. "You're not shipping your coal in. You're not extending transmission lines hundreds of miles. It all sits right there." The Railbelt is an electrical grid that runs from Fairbanks through Anchorage to the Kenai Peninsula and provides the majority of Alaskans' energy.

The coal sector has struggled with a persistent trend of a declining coal customer base as most utilities have shut down coal plants in favor of less emissions-intensive energy resources. The last coal plant larger than 100 MW to power up in the United States was over a decade ago, according to the US Energy Information Administration. That was the 932-MW Sandy Creek Energy Station in Texas that came online in 2013.

Coal-fired power plants with carbon capture and storage technology have proven expensive in some cases, but the availability of the United States' 45Q tax credits could make the project financially attractive, Dunleavy explained. This incentive, coupled with the coalfields' proximity, could make the project a viable and cost-effective solution.

Dunleavy added that the state is "sketching it out" and will likely release a request for proposal for the potential coal plants in a "couple of months." The governor added that there would be "probably two" coal plants, likely between 600 MW and 800 MW each. One plant would be located in southern Alaska and the other in central Alaska.

Dunleavy said a coal producer is already involved in discussions about the development. The governor mentioned that Usibelli Coal Mine Inc. has leases to mine in the state, although he would not confirm which coal producer was involved. According to S&P Global Market Intelligence data, the Usibelli mine in central Alaska's Denali County is the only active coal mine in Alaska. The mine sells coal to the Healy power plant owned by the Golden Valley Electric Association Inc.

Usibelli also owns the operating Chena Power Plant and the terminated Emma Creek Energy Project. Usibelli did not immediately return a request for comment.

In February, the University of Alaska Fairbanks released a feasibility study on a project comprising low-carbon power generation with carbon capture and storage. That study concluded that biomass-coal power generation with carbon capture and storage is a "compelling alternative" to the depleting natural gas reserves currently relied upon in Southcentral Alaska.