August 5, 2012
New Mexico

Wind energy development stalls in ‘bottleneck’ of New Mexico

By Kevin Robinson-Avila / Journal Staff Writer on Sun, Aug 5, 2012 | Albuquerque Journal | www.abqjournal.com 5 August 2012

New Mexico’s gusty eastern plains could produce electricity for millions of homes, but a transmission bottleneck has slowed wind-farm development to a crawl.

“New Mexico has substantial ability to develop and produce renewable energy, but the local market is small, and we need transmission lines to get that electricity to markets in other states that need it,” said Jeremy Turner, executive director of New Mexico’s Renewable Energy Transmission Authority. “It’s a real bottleneck.”

The Tres Amigas Superstation being planned near Clovis would allow generating stations in Texas and the eastern U.S. to send electricity for the first time to western markets. But New Mexico still needs to build more transmission lines to carry power westward.

Five large-scale transmission projects are in varying planning and development stages around the state. Together, they could provide enough capacity to transport more than 10,000 megawatts of electricity to western markets, generating billions of dollars in renewable energy investments in New Mexico, and creating thousands of construction and permanent jobs.

But none of those projects will come on line until at least 2015, and most will take longer.

In the meantime, New Mexico has slipped from its ranking in 2007 as sixth in the nation for installed wind capacity to No. 17 in the American Wind Association’s 2011 annual report.

This year only two small wind projects with a combined 45 megawatts of capacity will come online in New Mexico, the lowest annual build-out since local wind energy development began seven years ago.

From 2003 to 2010, developers built 696 megawatts of capacity at seven wind farms, installing an average of 116 megawatts per year. In 2011, however, only one 50-megawatt facility opened in Deming, supplying electricity to Arizona.

The two new wind farms coming online this year will serve New Mexico communities through direct connections to local utility grids. They include a 27-megawatt farm that began operating July 2 in Lovington to supply electricity to the Lea County Electric Cooperative, plus an 18-megawatt facility that will open in November near Clovis to supply electricity to Farmers Electric Cooperative.

The National Renewable Energy Laboratory in Colorado estimates that New Mexico has enough wind energy potential to generate about 75 times more electricity than the state needs. A recent analysis by Los Alamos National Laboratory also projects that investments in 5,200 megawatts of new transmission capacity could create nearly 25,000 temporary and permanent jobs in New Mexico over 20 years as construction and operation of new the transmission projects and wind and solar plants move forward.

The state Renewable Energy Transmission Authority, which has bonding authority to help design and finance clean energy transmission, is now working with Goldman Sachs and Public Service Company of New Mexico to build a 200-mile transmission line in north-central New Mexico. It would cost about $350 million, making 1,500 megawatts of transmission capacity available for export to western states.

RETA is supporting two projects in northern New Mexico led by private developers. That includes the Lucky Corridor – a $360 million, 93-mile line from Gladstone to Taos to add 1,100 megawatts of transmission capacity – and the Centennial West Clean Line, a $2.5 billion, 900-mile project to add 3,500 megawatts.

Two other private projects independent of RETA are also under development. The 500-mile SunZia line, to run from east-central New Mexico to Arizona, would cost about $1.5 billion and add 3,000 megawatts. A 240-mile Southline Transmission Project from Afton to Tucson will cost about $700 million and add 1,000 megawatts.

Record-low natural gas prices and uncertainty in Congress about renewing a wind-energy production tax credit that expires in December are disrupting the market.

“We’re seeing a slowdown in new projects,” said PNM Lead Developer of Engineering Projects Greg Miller. “I’m not seeing many agreements being signed right now between project developers and end users.”

PNM has about 1,500 megawatts of wind projects in the cue for interconnection to its transmission system.

On the other hand, with state-based renewable portfolio standards obligating utilities to buy more wind and solar power in many states, demand for renewable energy will continue to grow, said Michael McDiarmid, Wind Program Manager at the state Energy, Minerals and Natural Resources Department.

“Despite the ups and downs, I believe the wind industry will pick up again fairly quickly,” McDiarmid said.
— This article appeared on page A8 of the Albuquerque Journal