U.S. planning first new coal power plant since 2013 in Alaska

Terra Energy Center is pouring $1 billion into a deal for a planned coal project in Alaska, marking the first investment in new U.S. coal power in more than a decade.

The in-principal agreement with Hyundai Heavy Industries Power Systems for an order of power-plant boilers was described in a U.S. Interior Department fact sheet Monday. The transaction is one of several that advanced during talks at the Indo-Pacific Energy Security Ministerial and Business Forum in Tokyo this weekend.

Terra Energy Center’s plan represents a striking reversal for the U.S. coal industry. Coal once supplied more than half of the nation’s electricity, but that figure has been steadily declining and now stands at about 16%. The shift came as utilities turned to cheaper and cleaner power sources, including natural gas and renewables, in an effort to rein in climate change. Environmental groups have been pushing to eliminate coal power completely, and questioned the economics of developing new projects.

But President Donald Trump has been pushing for the country to burn more coal, especially with electricity demand set to surge as power-hungry data centers run artificial intelligence. The move is part of Trump’s expansive plan to reshape the U.S. energy landscape, promoting fossil fuels over intermittent renewables.

While Trump’s efforts to revive coal in his first term had little impact, he’s having more success since returning to the White House last year. The U.S. Energy Department has also ordered five coal plants that were set to retire to remain in service, and has indicated that it may issue similar orders to other sites that are preparing to shut down.

Experts are still skeptical about the long-term prospects for coal, and demand for the dirtiest fossil fuel is projected to continue its steady decline. There’s also no guarantee that decisions made now would continue to receive support under future administrations.

“The market doesn’t favor the construction of new coal,” said Dennis Wamsted, an energy analyst at the Institute for Energy Economics and Financial Analysis. “You can probably get anyone to finance anything in the U.S. The real question is: Will they ever get a return on their investment?”

The last major coal plant completed in the U.S. was Sandy Creek, a 932-megawatt facility in Texas that went into service in 2013. Terra Power is planning a 1.25-gigawatt power plant, and Koreit, a South Korean private equity company, has agreed to make a $500 million equity investment. according to the fact sheet.

(Michael Bloomberg, the founder and majority owner of Bloomberg LP – the parent company of Bloomberg News – committed $500 million to Beyond Carbon, a campaign aimed at closing the remaining coal-fired power plants in the U.S. by 2030 and halting the development of new natural gas-fired plants).