New Mexico’s ‘Energy Crossroads’: Report Makes Case For More Renewables

Although the legislative effort to strengthen New Mexico’s renewable portfolio standard (RPS) did not pass earlier this year, a new analysis by the Union of Concerned Scientists (UCS) finds that significantly increasing the state’s share of electricity from solar and wind would spur job creation, improve public health and benefit the environment.

The analysis concludes that adding more wind and solar power is the state’s cheapest option. However, some of the state’s largest utilities continue to plan for long-term investments in natural gas expansion, the group says.

“The looming question for policymakers is, ‘What replaces coal?’” says Julie McNamara, lead author of the study and energy analyst at UCS.

According to the group, New Mexico’s remaining coal plants are facing strong market pressure to retire early due to unfavorable economics.

“Utilities are building renewables but also are proposing much more natural gas,” McNamara adds. “Our analysis shows this would be the wrong choice. Major fossil fuel investments will be neither cheaper nor cleaner.”

In 2016, renewables accounted for 14% of New Mexico’s electricity production, says UCS. This amount is set to increase once several projects under construction or in development are completed.

The current state RPS, enacted in 2004 and strengthened in 2007, set a target of 20% renewable generation by 2020 for investor-owned utilities. The state electric utilities are on target to easily meet the current 2020 goal, says UCS. However, earlier this year, the New Mexico legislature proposed strengthening the requirement to 50% by 2030 and 80% by 2040. The bill did not pass, but legislative leaders expect to consider similar proposals during upcoming sessions, according to UCS.

The UCS analysis finds that with a strengthened RPS, New Mexico would nearly triple its 2016 wind capacity and more than double its 2016 solar capacity by 2030. This increased capacity would result in more than $6 billion in capital investment; nearly 2,400 new jobs in construction, operations, maintenance and other related fields by 2030; $21 million annually in state and local tax revenue; and as much as $9.5 million annually in land-lease payments. Furthermore, under a strengthened RPS, typical monthly electric bills for households in most years would be lower than they were in 2016, the analysis finds.

In addition to building renewables, the state’s largest electric utilities, including Public Service Co. of New Mexico, are also proposing a steadily increasing dependence on another fossil fuel: natural gas, says UCS. According to the group, expansion into natural gas risks ratepayer investments in stranded assets – e.g., infrastructure such as pipelines that would be abandoned due to the country’s expected shift away from fossil fuels; price volatility that can affect monthly bills; smaller reductions in carbon emissions; and fewer improvements to public health.

“New Mexico is truly at an energy crossroads,” says Jeff Deyette, report co-author and director of state policy and analysis at UCS. “Because investments in energy infrastructure last decades, what state leaders decide to do next will profoundly affect ratepayers, the economy and New Mexico’s communities for a generation or more.”

Deyette adds, “No doubt renewables will play a significant role in the state’s future. It’s time for New Mexico’s residents to also enjoy those benefits. Policymakers and residents must decide if they want to intentionally seize the considerable in-state job growth, community investment and public health improvements that come from turning towards a strengthened RPS and away from natural gas.”

More on the report can be found here.

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