Tuesday, April 26, 2011

New Mexico Unveils First Large Scale Solar Utility Plant

Wiithout a cloud in the sky, New Mexico's largest electric utility could not have picked a better day to unveil the first of five solar power generating stations it will build this year to meet state renewable energy requirements.

Officials with Public Service Company of New Mexico and Arizona-based manufacturer First Solar joined city leaders Wednesday to dedicate the 2-megawatt photovoltaic plant.

The massive collection of solar panels represents the utility's first venture into large-scale solar development in a state that has been recognized in numerous studies over the years as one of the nation's best spots for tapping the sun's energy.

It has taken years to set the regulatory stage for renewable energy development in New Mexico, but PNM bringing its solar arrays online this year couldn't come at a better time since pressure from environmentalists to curb emissions is growing and state renewable energy standards will only become more stringent over the next decade.

"This is a great new fuel source," PNM president and chief executive Pat Vincent-Collawn said as the sun beat down on the panels behind her. "It's not continuous, but it really helps us diversify our fuel sources, and as we've all seen with everything that's going on, having diversity is very, very important to us."

Nearly two-thirds of the electricity PNM generates for its 500,000 customers comes from coal and natural gas-fired power plants. The utility's portfolio also includes about 200 megawatts of wind energy, and it owns a stake in the Palo Verde nuclear power plant in Arizona.

Vincent-Collawn said coal and nuclear-generated power give PNM a critical base load that is available around the clock for customers. She said the utility is working on storage technology it hopes will offset the intermittency of wind and solar.

PNM's Albuquerque Solar Energy Center -- located just south of the utility's decades-old natural gas fired Reeves generating station -- is the largest collection of photovoltaic solar panels in the metro area.

Made up of 30,000 panels spread over 20 acres, the array is capable of generating enough electricity to meet the needs of about 630 homes.

It also marks the second major solar installation to open in New Mexico this week. On Tuesday, a Chevron subsidiary completed a 1-megawatt concentrating photovoltaic plant on a mine tailings site in northern New Mexico.

In all, PNM plans to add 22 megawatts of solar-generated power to its portfolio by the end of the year. That will be enough to power about 7,000 homes and offset 44 million pounds of the utility's annual carbon emissions.

PNM's $102 million investment in the solar arrays is driven by New Mexico's requirement that 10 percent of the electricity provided by investor-owned utilities come from renewable resources such as wind and solar. That requirement will increase incrementally to 20 percent by 2020.

About 30 states already have renewable energy standards, but there are some lawmakers who are pushing for Congress to establish a national standard.

U.S. Rep. Martin Heinrich, D-N.M., who attended Wednesday's dedication, has been among the supporters of a national standard. He said PNM's solar arrays mark "a big step forward" in how power is produced, how the electrical grid is managed and how the nation ensures its energy security.

"Up to now, a lot of customers started this ball rolling by investing in their own systems," he said.

Experts agree that one of the factors delaying development of large-scale renewables has been cost.

The cost of PNM's solar arrays will be passed on to customers through rates beginning in July 2012 as part of an agreement approved by state regulators. Cost thresholds designed to protect customers are built into the state's renewable energy requirements. The threshold this year is capped at 2 percent. It will be 2.25 percent next year.

Vincent-Collawn said PNM was able to save some money by building the Albuquerque array on land already owned by the utility.

The other four arrays will be built in Los Lunas, Deming, Alamogordo and Las Vegas. Those facilities will be more than twice the size of the one in Albuquerque.

SOURCE: http://www.businessweek.com/ap/financialnews/D9MO42EO1.htm

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