The Creation of a New Mexico

Renewable Energy

Transmission Authority

Renewable Energy in New Mexico

2006 Electric and Gas User Group Albuquerque, New Mexico

October 9, 2006

Fernando Martinez, DirectorEnergy, Conservation and Management Division

New Mexico Energy, Minerals, & Natural Resources Department

Overview of the Presentation

• Governor Richardson’s Leadership in Energy• Clean Energy Development Council• EMNRD’s Renewable Energy Program Areas• “Selling” Renewable Energy in New Mexico

– Positioning New Mexico to be a Leader in the “New Energy Economy”

• Policies, Programs and Incentives• 2007 Legislative Initiatives

– Creation of a New Mexico Renewable Energy Transmission Authority

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Governor Richardson’s Experience, Commitment, and Leadership has

Moved New Mexico forward in Energy

• Established numerous policies, programs, and incentives on renewable energy for NM.

• Issued Executive Orders on Renewable Energy including the Chicago Climate Exchange and

• International experience has attracted renewable energy companies (e.g. Sharp)

• Richardson with Governor Schwarzenegger spearheaded Western Governor’s Association Renewable Energy Initiative

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Clean Energy Development Council

Clean Energy Development Council

• Established by Exec Order 2004-019• Critical for state agencies, via CEDC

oversight and recommendations, to “lead by example” in energy efficiency, renewable energy and fuels

• Ensure state government consistency with Governor’s Clean Energy Initiatives

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• Appoint and monitor Task Forces and working Groups to develop policy recommendations, oversee implementation.

• Report annually to the Governor on activities, recommendations, and progress

• Meet at least quarterly thereafter to monitor progress.

Clean EnergyDevelopment Council

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EMNRD Renewable Energy Program Areas

• Renewable Fuels– Ethanol, biodiesel, compressed natural

gas, propane, hydrogen

• Renewable Energy– Solar, wind, biomass, geothermal

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Hydrogen in New Mexico

o EMNRD has dedicated $100,000 from State funding sources to support infrastructure development for a hydrogen project in Albuquerque. EMNRD is coordinating this effort with the City of Albuquerque.

o EMNRD has awarded $1,000,000 from State funding sources to the New Mexico Technology Research Collaborative (New Mexico Tech is the fiscal agent) to support educational programs and hydrogen fuel projects.

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Solar-powered Electrolyzer and H2 Fuel Cell Bus at Sunline Transit t, Thousand Palms, California

Hydrogen Projects In Other States

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Hydrogen Fuel StationChicago Transit Authority

Hydrogen Projects In Other States

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Solar Energy Resource:New Mexico 2nd in the United States

• “Distributed” Solar• Photovoltaic (electric)

Applications– Residential– Commercial– Institutional/Government– Schools with Solar– Agricultural/Ranching Tracking 700-Watt PV system,

Schools with Sol site. Santa Fe, New Mexico

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Solar Thermal– Water and space heating,

solar adsorption cooling– Cost-effective alternative

now!– Reduce impacts of high

natural gas prices– Solar thermal should be

seriously considered for all new buildings

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Solar Hot Water System,Grady Elementary, NM

New Mexico’s Keen Interestin: Concentrating Solar Power

• Large-scale, central station solar electric power

• 350 MW “Parabolic Trough”plants: operating in CA for over 15 years

• Cost projections: 15¢/kwh to 4-6¢/kwh – competitive with new fossil-fuel plants

• Nevada: 64 MW trough plant under construction

NM Solar Resource Map

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New Mexico’s WorldClass Solar Energy

Resource

and

Concentrating Solar Power Sites

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New MexicoA Participating Member of

SolarPACES’ 5000 MW CSP Global Market Initiative

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New Mexico is Very Interested in “Mini Solar Thermal Power Plant” (MSTPP)

Technologies

Huge future load growth: shift from evaporative cooling to energy intensive refrigerated air conditioning (A/C)

* MSTPP viewed as a viable alternative to A/C

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HelioDynamics, a UK company, is pursuing deployment of their MSTPP technology in NM

32 kw system in Tampa, Florida 16

U.S. Wind Resource Map

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Large-Scale Wind Power

• Price: dropped from over 20¢/kWh to < 5¢/kWh over last 2 decades– Competitive with new fossil-

fuel plants• 400+ MW - 6th in nation in

generation• Best Wind – Eastern Plains

– Farming and Ranching economy stressed by drought

• Intermittent resource –can’t make the wind blow

• No water consumption New Mexico Wind Resource Map

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New Mexico’s Tax Incentives have Attracted Wind Developers

• Existing Wind Ranches– 204 MW “NM Wind Energy Center”, FPL/PNM, House, NM –

(operating)– 80 MW, “Caprock”, Xcel/SPS, San Jon, NM (operating)– 120 MW, “San Juan Mesa”, Xcel/SPS, Elida, NM (operating)– 90 MW, “Argon Mesa”, AZ Public Svc., Santa Rosa, NM (under

construction)• 1st project designed to “export” NM’s renewable energy to out-of-

state markets• RE Transmission Authority – needed to pursue export on a large

(1000s of MWs) scale.

– Above projects represent over $500 million in investment

– More projects, of various scales, being pursued 19

Biomass

• Forest thinnings– Watershed management– Reduce danger of fire-

prone forests• Dairy and feedlot

waste– Improve groundwater

quality• Applications: electricity, heat,

liquid fuels, oils, chemicals

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Electricity from Biomass

– $74 million, 35 MW plant, Estancia – PNM to purchase power under RPS requirement

– Operational in 2009– 100-150 construction jobs, 20 permanent

jobs at plant, 50-100 jobs involved with harvesting forest material

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Dairy and Feedlot Waste Can Become

ReMOOable Energy!

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Biofuels Production

– Abengoa Ethanol Plant, Portales, – recently increased from 15 to 30 million gal./yr in operating prod. capacity

– ConAgra Ethanol Plant, Clovis – plans for a 100 MG/yr ethanol plant, operational in 2008

– Other projects on drawing board:• More grain-based ethanol• Bio-diesel• Cellulosic ethanol

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Abengoa’s Recently Expanded 30 Million Gallon/Year Ethanol Plant

Portales, New Mexico

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Selling Renewable Energy in New Mexico

– Primary Benefits:• Positioning New Mexico to be a Leader in the New Energy

Economy• Reducing consumers’ energy bills in the face of high fuel

costs (natural gas and gasoline)

– Additional Benefits:• Reducing state and local government operating costs lower

utility bills• Businesses and industry more cost-competitive• Protecting New Mexico’s natural areas• Decreasing consumptive water use – fossil fueled electricity

consumes > 50 KAF/yr!• NM’s contribution toward national energy security • Protecting public health reducing air pollution and

greenhouse gas emissions25

Competing for the 21st Century Energy Economy- The Message

that Resonates• New Mexico is competing with other countries and states

(CA,TX, NJ, AZ) for this emerging economic “pie”• Renewable energy projects and related manufacturing

offer significant economic stimulus and job creation• Year 2100: the nation’s energy-based economy won’t

look much like today’s energy economy– Renewables, state-of-the-art efficiency, fuel cells,

nanotechnology, etc.• 20th Century: New Mexico was a national leader in

energy development. What’s next? • New Mexico State Legislature recognizes the critical role

renewable energy is playing in diversifying the state’s economy.

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Policies, Programs & Incentives

• Renewable Portfolio Standard– 10% by 2011, large utilities only– Solar counts 3:1, Biomass 2:1– 2% rate cap – 15 cents/kwh PV cap, 10 cents/kwh

CSP and Biomass cap– 400+ MW of wind installed in response

• RE Production Tax Credit– 1 cent/kwh up to max. of $4 million/yr/facility for 10

years (one of only two states with RE PTC)

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• Hybrid Vehicles Sales Tax Exemption:– Saves $600-900+ on purchase – Complements new federal income tax credit

• Efficient Use of Energy Act– Requires utilities to have EE programs - $20

million+/year in expenditures– Initiates Integrated Resource Planning (IRP) process

• Renewable Energy Revenue Bonds Act– First in Nation Innovative Funding Approach - $20

million bond issue paid for out of energy utility bill savings

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Policies, Programs & Incentives continued…

• Clean Energy Grants Program – Grants to schools, local governments, tribes

• Solar Market Development Income Tax Credit – PV and Solar Thermal– 30%, capped at $9000– 10 year sunset– Complements federal tax credits– Complements New Mexico’s largest utility’s 13 cent/kwh

Renewable Energy Credit “buy-back” from PV self-generators

• New Mexico Public Regulation Utility Commission -10 kw Net Metering Rule– Rule-making underway to increase to 100 kw+– Governor Richardson supports going to 1 MW

Policies, Programs & Incentives continued…

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Governor Richardson’s Renewable Energy Executive

Orders• 2004-19 Declaring New Mexico the “Clean Energy State”

– 6 policy Task Forces – led to legislation• 2005-033 Establishing Climate Change Greenhouse Gas

Reduction Targets– 2000 CO2 Emissions by 2010

• 10% below 2000 by 2020 • 75% below 2000 by 2050

– 1st state in Nation to join Chicago Climate Exchange• 2005-049 Requiring the use of Renewable Fuels in

– New Mexico State Government

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2007 Legislative Initiatives

• Renewable Energy Transmission Authority Act• Amendments to Renewable Energy Production

Tax Credit– Increase to 2 cents/kwh for solar– Decrease minimum production capacity

requirement to 1 MW• Exempt Concentrating Solar Power Projects

from sales (GRT) tax– Recurring revenue source for CE Grants Program

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Creation of a New Mexico Renewable Energy

Transmission Authority

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#1 Priority

Renewable Energy Transmission Authority Act

• Provides for planning, construction, financing, and operation of transmission infrastructure– Authorizes revenue bonds for Electricity

Transmission Projects– Requires minimum of 30% renewable energy– Designed to meet NM renewable energy needs

and export renewables to out-of-state markets

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Board Qualifications• Member appointed by governor financial expert

involving financing of major electrical transmission• Other four members: special knowledge of public

utility industry• No member shall own or operate a facility• Secretary of Energy, Minerals, and Natural

Resources shall serve as ex-officio nonvoting members of the authority

• Governor to appoint chair

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Renewable Energy Transmission

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Three Key Points to leave You With:

• New Mexico has a comprehensive set of renewable energy incentives to attract new projects and developers

• New Mexico has world class wind and solar energy resources

• New Mexico’s Governor and its State Legislature are committed to promoting renewable energy development in the State

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Thank you

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