Will New Mexico Join the Next Generation of Clean Energy Leaders?

, director of state policy & analysis, Clean Energy | February 21, 2017, 10:53 am EST
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More and more states across the country are redefining what it means to be a clean energy leader by doubling down on their commitments to deploy solar, wind, and other renewable energy sources. Now the New Mexico legislature wants to add their state to the growing list. Recently introduced legislation would increase New Mexico’s successful renewable electricity standard (RES) from its current level of 20 percent by 2020 to 80 percent by 2040. Adopting the measure would capitalize on the state’s tremendous renewable energy resources and deliver substantial economic, health, and environmental benefits to all New Mexicans.

A renewable energy economy is achievable and affordable for New Mexico

The New Mexico Wind Energy Center, located in the southeast part of the state, generates clean, renewable power for energy consumers. Photo Source: Oak Ridge National Laboratory

Introduced as SB312, the legislation builds on New Mexico’s current RES (also referred to as a renewables portfolio standard or RPS) and would require investor-owned utilities like PNM, Southwestern Public Service, and El Paso Electric to increase their supply of electricity from renewable energy sources to 80 percent by 2040.

Rural co-ops would have to achieve a slightly lower target (70 percent renewables by 2040).

While this newly proposed commitment is substantial, transitioning New Mexico’s economy to one powered primarily by renewable energy is certainly achievable. That’s because New Mexico is home to some of the best and most diverse renewable energy potential in the country, including vast untapped wind, solar, and geothermal resources.

A 2016 National Renewable Energy Laboratory analysis found that New Mexico’s economic renewable energy resource potential, which accounts for the renewables’ cost as compared with the typical regional cost of electricity, is more than 2.6 times total state electricity sales in 2015 (see figure). That means there is more than enough cost-competitive renewable energy resources available today to comply with the proposed targets that utilities have more than two decades to achieve.

Of course, New Mexico’s technical renewable energy resource potential far exceeds these economic potential estimates. As technology costs continue to decline, more and more of the untapped technical resource potential will also become cost-effective over time.

New Mexico’s Renewable Energy Economic Potential vs. Electricity Sales.
New Mexico has more than enough cost-effective renewable energy potential to achieve an 80 percent RES. The National Renewable Energy Laboratory estimates the state’s economic potential at more than 260 percent of total electricity sales in 2015.
Sources: Economic Potential from Primary Case 3a in NREL’s Estimating Renewable Energy Economic Potential in the United StatesElectricity Sales from U.S. Energy Information Administration’s New Mexico State Electricity Profile 2015.

 

Wind and solar costs, in particular, are falling rapidly. The most recent comparison of costs by the energy consulting firm, Lazard, shows new wind and solar to be cheaper than new fossil fuel generation, even without subsidies.

This trend is reflected in recent power purchase contracts for wind and solar projects in the region. For example, Southwestern Public Service signed a contract for a 140 megawatt (MW) solar project near Roswell for about 4 cents per kilowatt-hour (c/kWh). Similarly, reported costs for recent wind projects in the Southwest have been as low as 2.3 to 3.8 c/kWh.

For context, Lazard estimates the cost of power from a typical new natural gas combined cycle plant ranges from 4.8 to 7.8 c/kWh.

The proposed 80 percent by 2040 RES expansion ramps up gradually over time, with interim targets for public utilities of 35 percent in 2025, 50 percent in 2030, and 65 percent in 2035. That level of increasing targets affords utilities plenty of time to plan for new renewable energy development as older fossil fuel generators retire. What’s more, the legislation builds in consumer protections should compliance costs prove to be higher than anticipated.

New Mexico’s renewable energy transition is already delivering benefits

New Mexico’s current RES is already successfully driving new renewable energy deployment and delivering economic and environmental benefits throughout the state. Today, more than 1,500 MW of wind and solar power capacity is cranking out clean power for New Mexico’s energy consumers. The wind power development alone represent more than $1.8 billion in investments and provide up to $5 million annually in land lease payments for local residents.

Another 1,500 MW of wind and nearly 1,400 MW of solar are either under construction or in various stages of development in the state. When completed, these projects combined with those already operational will exceed the state’s current renewable energy targets. Further diversifying New Mexico’s power supply with additional renewable energy can provide much needed investment and tax dollars to local economies and the state government’s struggling budget coffers.

Combined, the wind and solar industries are supporting 4,000 to 5,000 good paying jobs in the state, and that number continues to grow. Earlier this month, Albuquerque-based solar manufacturer SolAero Technologies announced plans for a $10 million expansion that will add more than 100 jobs. New Mexico’s excellent and affordable solar energy resource is also an important reason that Facebook decided to build a new data center in the state. An investment of $45 million will fund three new solar facilities that will fully power the new facility and create hundreds of new jobs.

Photo Source: U.S. Department of Interior

In addition to jobs and local economic benefits, New Mexico’s existing renewable energy development is helping to curb power sector carbon emissions—the principal contributor to global warming— and other air pollutants like sulfur dioxide and particulates that harm state residents. These toxic pollutants are responsible for numerous health problems including aggravated asthma attacks, breathing problems, heart attacks, and premature deaths, especially in vulnerable and disadvantaged communities closest to the sources.

In strong contrast to fossil fuel generation, wind and solar power generation also use virtually no water, an incredibly valuable benefit in a water-constrained state like New Mexico. The American Wind Energy Association estimates that in 2015, the state’s wind projects avoided the consumption of 264 million gallons of water.

All of these economic and environmental benefits are poised to grow substantially if SB 312 is adopted and New Mexico accelerates its shift away from a heavy dependence on coal for power generation.

Joining the 50 percent (plus) club

New Mexico is not alone in its pursuit of a cleaner, safer, and more affordable energy system. Several states—including California, Oregon, New York, Vermont, Massachusetts, and Hawaii—have already expanded their RES targets to at least 50 percent (100 percent, in Hawaii’s case), and are implementing effective solutions to reliably integrate significant amounts of renewable energy on their power systems. Nevada is considering similar RES expansion legislation this year as well.

With a new federal administration seemingly determined to stay stuck in the fossil fuel age, this kind of state leadership is needed now more than ever. New Mexico should adopt SB 312 and set a course to fully embrace its renewable energy future. Doing so will deliver significant rewards for the state’s residents and set an example for other states to follow.

Posted in: Energy

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  • There’s still DIY solar. My system runs the pool pumps, the swamp cooler and a small window AC. We need better battery tech and it is coming. Soon we will be able to tell the energy corps to shove it. Until then solar is only a very small part of our energy use/production, just a fact.