Alaska Gets a (Sort-of) New Coal Plant

Golden Valley Electric Association in Healy, Alaska, has fired up a refurbished 50-MW coal plant that has been idle for the past 16 years. Crews from the rural electric cooperative started the boiler at Healy Plant 2 (joining 25-MW Healy Plant 1) last Thursday as the unit arose from the ashes of a failed government-supported “clean coal technology” project.

When built in the 1990s, the plant was known as the Healy Clean Coal Plant. It was built for $300 million to demonstrate combustion technology that could burn a range of coals, including coal wastes. The U.S. Department of Energy furnished $120 million of the capital cost, with the Alaska Legislature putting up $25 million, the Alaska Industrial Development and Export Authority (AIDEA) $150 million, and Golden Valley and Usibelli Coal Mine, Inc. investing $10 million each in in-kind contributions. AIDEA owned the plant, with plans to sell the power to Golden Valley.

According to Fairbanks-based Golden Valley, the plant ran briefly in 1999 but shut down quickly. That led to years of litigation between Golden Valley and AIDEA over whether the plant was able to operate reliably. Cory Borgeson, Golden Valley’s president, told the Fairbanks Daily News-Miner, “It was akin to someone saying your car is ready, but you say, ‘What do you mean? It only gets five miles per gallon and you need two mechanics in the back seat.’”

In a deal finalized in late 2013, Golden Valley agreed to buy the plant for $44 million and began working to get it ready to burn the same Usibelli coal (subbituminous 7,500 Btu/lb) used in the original Healy plant. Usibelli’s surface mine is located close to Healy, which is 115 miles south of Fairbanks. Usibelli delivers coal from its surface mine to the plant site by truck.

Once it took over ownership of the troubled plant, Golden Valley began a process of converting the unit to conventional coal technology, applying for environmental permits, and testing. Black & Veatch is coordinating the restart project.

According to the utility, the plant started up on oil, beginning a planned test phase for the next two months. The plant should produce a small amount of power in mid-June and reach full operation burning coal in late July.

Lynn Thompson, power supply vice president for Golden Valley, told the Fairbanks newspaper, “It’s kind of like an orchestra. We’ve had the different instruments going in the band. We’ve had the flute player and we’ve shut the flute player off. We’ve had the tuba section run and we’ve shut the tubas off. We’ve never had them run together as an orchestra, and that’s the point we’re at now.”

The utility budgeted $190 million for the project, including $92 million in environmental upgrades to meet U.S. Environmental Protection Agency rules.

According to Golden Valley, “Work will continue at the plant for the next two years. Environmental controls and anew warehouse are being built adjacent to Healy 2. The environmental controls are scheduled for completion in summer 2017.”

—Kennedy Maize is a regularly contributor to POWER (@kennedymaize).

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