New Analysis Shows the Benefits of a Clean Energy Future in New Mexico

, director of state policy & analysis, Clean Energy | March 10, 2016, 9:40 am EDT
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New Mexico’s Governor Martinez has yet to state publicly whether she’ll join at least 16 other states in continuing to plan for compliance with the EPA’s Clean Power Plan, despite the recent Supreme Court stay. The governor should forge ahead with the planning process and work with the legislature, state agencies, and utilities to expand on commitments to invest in renewables and efficiency.

A new UCS analysis released today shows that moving forward in this way would accelerate the state’s clean energy transition while delivering important economic, consumer, and public health benefits.

Strengthening New Mexico’s clean energy commitments

New Mexico has the potential to be a national leader in the rapidly growing clean energy economy. Wind and solar power development is increasing, largely thanks to great resource potential, declining costs, and a successful state-level requirement that utilities supply 20 percent of their power from renewable sources by 2020 (referred to as a renewable electricity standard or RES).

Increased renewable energy development will help New Mexico meet its Clean Power Plan targets while also generating economic benefits. Source: Macho Springs Solar LLC

Increased renewable energy development will help New Mexico meet its Clean Power Plan targets while also generating economic benefits. Photo: Macho Springs Solar LLC

Investments in energy efficiency—spurred by an energy efficiency resource standard (EERS) that requires electricity providers to implement programs that reduce electricity demand 10 percent below 2005 levels by 2020—are also helping to save consumers money and reduce electricity demand.

Yet much of New Mexico’s clean energy resources remain untapped, and nearly two-thirds of the state’s power still comes from aging and polluting coal power plants.

Strengthening its commitment to renewables and efficiency as part of a broader Clean Power Plan compliance strategy can help New Mexico reduce its dependence on coal and bring the state in line with other national leaders in the clean energy transition.

Evaluating a robust pathway for Clean Power Plan compliance

Using the Regional Energy Deployment System model developed by the National Renewable Energy Laboratory, our analysis examines the impacts on consumers, the economy, and the environment of an accelerated clean energy transition in New Mexico.

Specifically we evaluate a “Clean Path Case” that couples a robust carbon emissions trading program with strengthened RES and EERS policies (respectively 31 percent renewable energy by 2030, and 1.5 percent per year efficiency savings starting in 2022). This pathway toward a clean energy future will not only help the state reach its carbon emissions reduction target, but also reap significant health and economic benefits for all New Mexicans. Our findings show that the Clean Path Case will:

  • Yield 2,400 megawatts of new wind and solar capacity by 2030, stimulating more than $2.7 billion in new capital investments
  • Drive $766 million in energy efficiency improvements by 2030, reducing electricity sales by more than 11 percent
  • Generate $115 million in average annual revenue from 2022 to 2030 due to the sale of carbon allowances
  • Provide $223 million in health and economic benefits through 2030 by decreasing carbon dioxide, sulfur dioxide, and nitrogen oxides pollution

An affordable transition to a lower-carbon economy

The clean energy growth in New Mexico spurred by the Clean Path Case is not only achievable but also can save consumers money (see figure). The average monthly electricity bill for a typical household under the Clean Path Case is 1.7 percent lower than compared with ‘business as usual’ in 2022, amounting to an annual savings of about $13.

The Clean Path Case leads to consumer electricity bills in 2030 that are 4.3 percent lower on average than in the Reference Case. Energy efficiency helps consumers save electricity, and more renewable energy helps diversify the electricity mix and limit potential impacts from increases in natural gas prices.

The Clean Path Case leads to consumer electricity bills in 2030 that are 4.3 percent lower on average than in the Reference Case. Energy efficiency helps consumers save electricity, and more renewable energy helps diversify the electricity mix and limit potential impacts from increases in natural gas prices.

And although monthly bill savings under the Clean Path Case are less by 2025 (0.4 percent decrease or approximately $3 in savings per year), the case soon returns to stronger consumer savings: 4.3 percent lower electricity bills by 2030, or $33 in annual savings. This is due to several factors—the cost to operate most renewable energy facilities is much lower than that of fossil fuel plants, energy-efficient buildings and appliances cost less to operate, and more renewable energy and efficiency helps diversify the electricity mix and limit fossil fuel price increases.

Securing a clean energy future in New Mexico

It makes sense for New Mexico to join other clean energy leading states in continuing to develop its Clean Power Plan compliance strategy. Indeed, with well-designed policies and careful planning and coordination, New Mexico could greatly enhance its clean energy resources, cost-effectively comply with its emissions reduction requirements, and reap important economic and public health benefits.

Furthermore, with a robust emissions trading program, coupled with rigorous equity and justice protections, New Mexico could generate significant carbon revenues that could be used to support renewable energy and energy efficiency, strengthen disadvantaged communities, and boost economic development throughout the state.

New Mexico is well-positioned to cut its carbon emissions and accelerate the growth of clean energy. Building on, rather than staying, that progress is the most prudent and responsible course of action.

Feature image: J.N. Stuart/Flickr

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  • Susan M. Purviance

    I applaud the clean energy initiative in New Mexico. This is a largely Democratic and progressive state which also has petrochemical resources, so the plan is workable. It will benefit all New Mexicans. However I do have a concern about bird migration and confusion for bird populations. New Mexico does not have as many major flyway risks as Oklahoma and Kansas for example, but I would still like to see the science on this. Ornithologists and animal population biologists, please weigh in on wind turbine best practices for birds. Thanks !