Alaska’s largest coal plant closes, as green energy takes hold

The closure of Healy Unit 2 signals a rise in renewable energy projects around Alaska.
Wind turbines in Alaska
The shuttering of the plant and the decision to invest in renewable energy represents a new direction for the future of Alaska energy. Getty Images

This article was originally featured on High Country News.

Healy Unit 2, Alaska’s largest coal plant, sits near Healy Canyon, just north of Denali National Park in Alaska’s Interior. When it was built in the 1990s, it was the area’s second coal plant, an experimental project meant to generate enough energy to power tens of thousands of homes, more than twice that of its predecessor, Healy Unit 1. But for the last five years, it has been plagued by operational issues and the need for costly repairs, and on June 27, the board of the Golden Valley Electric Association, the nonprofit cooperative that runs the plant, voted to shut it down, invest in wind energy and install $26.1 million in pollution-control equipment on Healy Unit 1 by the end of 2024.

Golden Valley also operates a wind farm, diesel plants, a solar farm and other facilities that serve about 100,000 people in Interior Alaska. For more than five years, the Fairbanks Climate Action Coalition, an Alaska-based volunteer-led climate education and advocacy group, has urged Golden Valley Electric’s customers to push the electric co-op to transition to renewable energy. The association’s new plan comes after its board, employees and consultants spent 18 months reviewing new options for “strategic generation,” according to a news release. (Golden Valley Electric Association did not provide further details about its plans to High Country News.)

“This is not only the single largest coal plant in the state of Alaska; it’s the biggest closure, so this is a watershed moment,” said Philip Wight, a professor specializing in Arctic energy history at the University of Alaska Fairbanks. The shuttering of the plant and the decision to invest in renewable energy represents a new direction for the future of Alaska energy.

Coal has been the dominant energy source in Alaska’s Interior since the Alaska Railroad completed a track through the region in 1923. But that’s changing quickly as other reliable but lower-carbon energy sources become available. Large-scale renewable power plants, like the Fire Island wind project near Anchorage and the Eva Creek wind farm near Fairbanks, came online a decade ago. Then there was a lull in development—until now. Andrew McDonnell, co-founder of Fairbanks-based green-energy company Alaska Renewables LLC, said that Golden Valley’s plan to purchase renewable energy represents a statewide shift. Alaska Renewables, for example, is planning a wind farm on Little Mount Susitna that would help power Anchorage, Alaska’s largest city.

Other renewable projects are also getting off the ground. In 2014, a hydrokinetic power system that produces electricity from river currents was built in the remote community of Igiugig. It currently provides one-third of the community’s energy needs. The Qawalangin Tribe of Unalaska secured $2 million in federal funds for a geothermal plant in the Aleutian Islands, which will source energy from Mount Makushin, an active volcano. The island community, home to the nation’s busiest fishing port, has relied exclusively on diesel power since World War II, but starting in 2024, the geothermal plant is expected to provide more than enough power for its community and fishing operations. On Alaska’s Kenai Peninsula last month, officials approved a 25-year lease that would transform a 40-acre dump site in Sterling into a solar farm. And last month, the U.S. Department of Energy announced a project to assess how 12 remote communities, including three in Alaska—McGrath, Igiugig and Nikolski/St. George—can improve their renewable energy infrastructure.

As these new projects take shape, communities like Healy, a small town in the Interior where many residents work in the coal industry, either at Golden Valley Electric Association or the Usibelli Coal Mine, will have to quickly adapt. It’s expected to take about 30 months to close Healy Unit 2, so over the next 90 days, the energy cooperation will identify other opportunities for current employees, “including jobs within GVEA, training, skill building and transitional services,” the electric association’s press release said.

In 2007, when the Kodiak Electric Association made the decision to move away from diesel on Kodiak Island, it successfully transitioned its workforce into other jobs, said Jennifer King, a regulatory specialist at the co-op. Diesel mechanics, for example, were sent to General Electric’s wind-turbine maintenance school to get certified as technicians. Now, Kodiak Island has a small electrical grid that has been running on about 99% renewable energy for nearly a decade.

As Healy makes the shift, Kenzley Defler, the energy justice coordinator with Fairbanks Climate Action Coalition, said the coalition plans to hold Golden Valley Electric Association accountable for its employee transition plan, which the energy association expects to complete in the next few months. Though this planning will take work, it also comes with new opportunities; According to a March 2022 report from Alaska Climate Alliance, renewable energy development in Alaska has the potential to create over 100,000 new jobs.

“Every place is unique and site-specific,” Kodiak Island’s King said. “That is the challenge with every energy and especially renewable energy. You got to work with the resources that you have. But there are other places where it can be done as well, if people are willing to give it a chance.”