As Coal Threatens to Rock the Boat of New Mexico’s Fragile Economy, Renewables Are Shown as a Path to Not Only Steady the Ship, but Make it Sail

 “At the end of the day, [the Energy Transition Act] embraces compromise as a means of moving forward; it looks to unite state, customer, and utility interests under single cover, working to navigate a viable path out of the deep and tangled morass.”  - JULIE MCNAMARA, UNION OF CONCERNED SCIENTISTS : SB 489 is the Clean Energy Catalyst New Mexico Needs

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The San Juan Generating Station in Northern New Mexico will be completely shut down by 2022

The San Juan Generating Station in Northern New Mexico will be completely shut down by 2022

New Mexico, where KiloNewton calls home, is a historically economically depressed state. The state’s economy notoriously relies on Federal money, with two national labs (Sandia and Los Alamos), and numerous military bases. Aside from Federal money, the state relies heavily on the energy industry, primarily oil and gas. Yet legislation to move the state towards a renewable energy economy is working its way through Santa Fe after years of similar bills dying in committee. The Energy Transition Act (SB 489) is a multi-pronged approach towards meeting renewable energy goals and meeting the economic challenges that may come from that transition.

Part of the transition includes the closure of the Public Service Company of New Mexico’s (PNM) San Juan Generating Station, a coal-fired power plant near the town of Farmington in Northern New Mexico, by 2022, about 20 years before the end of its projected lifespan. The plant employs approximately 400 people directly, and the San Juan Mine, which solely supplies coal to the power plant, employs approximately another 360 people. For the small towns in Northern New Mexico, that makes the coal plant and mine the biggest employers of the area. Only a couple of years back, PNM’s plan was to keep the plant operating indefinitely. The concern in the region about closing the plant is prevalent, including among the Navajo Nation.

With New Mexico ranking near the bottom in employment and economic rankings, the question arises: why rock the boat?

The answer is that the boat was already rocking.

In 2017, PNM released an integrated resource plan that included an estimate showing the utility would save between $80 and $450 million in a 20-year period, savings that would be (eventually) passed onto PNM’s customers. PNM’s plan also calls for the utility to be completely coal-free by 2031, when its coal supply agreement ends with the Four Corners Power Plant. The economic evaluation by PNM shows that investing in new renewable facilities, supplemented (for now) with natural gas facilities for peak demand and existing nuclear generation, is cheaper in the long run than keeping the San Juan plant open and retaining investment in the Four Corners plant.

This isn’t just a PNM thing or utilities bowing to pressure. Coal plants all around the country are closing prematurely because they are no longer economically viable. Coal mines are feeling the pressure as well.  The owner of the San Juan Mine, Westmoreland Coal, filed for bankruptcy last year

But, the economic ship of New Mexico doesn’t solely reside on the prowess of PNM’s financial success. The economic impact of coal-fired generation plants closing goes beyond the cost of renewables compared to coal. The San Juan plant and the mine have high-paying jobs, tax revenue both to the state and locally, and other peripheral aspects like scholarships and charitable donations, that are not easily replaced.

These economic waves are already rocking the boat of New Mexico’s economy, and indeed might sink it if not addressed.  That’s where the Energy Transition Act (SB 489) comes into play.  

PNM has admitted that the debts involved with the San Juan plant, the cost of closing it down, and the investment required to replace the generation new resources will in the short-term result in higher rates for consumers.  The Energy Transition Act addresses the financial aspects of PNM’s outstanding debt associated with the San Juan station, providing a way out to lessen the burden passed onto consumers.

More importantly, the bill sets aside money for severance and job training for those affected by the closing of the plant, including those working in the mine that serves San Juan.  It requires that new generation facilities host apprenticeships, further developing a skilled labor pool and higher-paying jobs.  And while encouraging job growth and stability, it also encourages innovations in technology as a way to ease the transition. 

Along with the requirement the state achieve a 50 percent renewable energy portfolio by 2030, and 80 percent by 2040, the Energy Transition Act is powerful tool to not only keep the ship upright, but make it sail.  While not as aggressive as the Green New Deal that is making headlines on the Federal level, it’s along the same vein.  It doesn’t just require a transition to renewable energy, it creates a feasible path with the potential to lift the economics of New Mexico from the bottom rankings of the nation.  In a broader view, it shows the economic promise of investment in renewable energy when an economically-depressed state embraces it over the sinking ship of coal. 

Renewables and Microgrids Can Help Mitigate Disasters

“The most controversial part of PG&E’s plan is to dramatically expand the scope of planned grid outages, which are intended to preempt the risk of its grid sparking more deadly wildfires this summer, and the disruptions and dangers those blackouts could cause… [PG&E is] also proposing some novel concepts, like working with non-utility partners to install or utilize on-site generation or distributed energy resources for continuous power during safety outages, and exploring the potential for true microgrid systems to play a role.”   - GTM: Breaking Down PG&E’s Plan to Use Power Outages to Prevent Wildfires

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California utility PG&E has a plan to prevent catastrophic forest fires like last year’s Camp Fire, but it potentially leaves millions without power during the upcoming summer.  The California utility has been linked to multiple wildfires, including the devastating Camp Fire last November, as their transmission lines and equipment were found to have started the fires.  So, the essence of the plan is to turn of the grid during peak fire times. 

While the power outages are making the headlines, buried in PG&E’s plan is to develop distributed (on-site) power generation and “sectionalizing” its grid or creating true microgrids. 

Distributed generation is done best with renewable energy.  While wind power isn’t best for residential areas, it has been a good fit for industrial installations.  Solar works well in all areas.  The main difficulty with this is the variability of generation inherent in renewables.   The wind and sun don’t necessarily blow or shine when power is needed.  But established microgrids with multiple sources of renewable power and the capability for power storage would be ideal for the Northern California areas susceptible to catastrophic fires.  Michael Wara, the director of the Climate and Energy Policy Program at the Woods Institute for the Environment at Stanford University, notes in an LA Times op-ed last December, the utility needs to “make it acceptable” to turn off the grid, and implementing these changes is how it needs to happen. 

This approach could work well nearly anywhere in the US.  For example, renewable energy coupled with microgrids could help the recovery of areas affected by hurricanes, tornadoes, or a man-made catastrophe

The more than a dozen fires that PG&E has been linked to have driven the utility to bankruptcy.  The utility literally cannot afford to be the cause of more forest fires and is looking for options from the state to implement its plan.  However, the integration of distributed generation, microgrids, and other renewable options is nearly impossible to achieve before the fire season of 2019.  Expect the pressure on PG&E from consumers without power, or if another wildfire is caused by the utility, to increase 10-fold to implement these changes.   And expect other utilities to follow suit. 

The Green New Deal May Be Green, but It’s Not New

“While the unveiling of a Green New Deal resolution including 100% clean energy by 2030 is making headlines today and is a powerful political statement, the real policy action is elsewhere.” - PV MAGAZINE - The Green New Deal Is Going to Happen at the State, Not Federal Level

The new Democratic majority recently unveiled the framework for an ambitious piece of legislation called the Green New Deal, named after President Franklin Roosevelt’s signature New Deal that helped lift the United States out of the aftermath of the Great Depression. The Green New Deal proposes a massive energy infrastructure transition clean, renewable, and zero-emission sources, with the benefit of job creation and tackling economic inequality. 

Credit: SAUL LOEB/AFP/Getty Images

Credit: SAUL LOEB/AFP/Getty Images

The bill has no real chance to become law with a Republican Senate and President, who claim its objectives are impossible and are too expensive.

The initial framework lacks specifics and proposes some nearly impossible goals (for example: upgrading or replacing every building in the country and making air travel obsolete). 

However, the Republicans’ the blanket dismissal is shortsighted, especially with respect to renewable energy.  In fact, as PV Magazine points out, the push towards implementing renewable energy on a larger scale is already happening at the state level.  Thirty-eight states (including D.C.) have some sort of renewable energy goal, of which 30 are mandatory standards. Seven of those states have goals of more than 50 percent. Five more states will most likely join those ranks, as their newly-elected governors have pledged to implement a transition to 100 percent renewables. 

In addition, a fundamental shift is happening among energy consumers. According to a Monmouth University poll released in November 2018, much of the country now acknowledge that climate change is happening, including Republicans, who have historically denied it is happening.  Despite the acceptance, the cause and severity are topics where public opinion is widely split. Yet, nearly 70 percent believe that the Federal government should do something to mitigate climate change.

Image: Sunrise Movement

Image: Sunrise Movement

More than 160 companies worldwide have made commitments to get their energy from 100 percent renewable sources. Residential customers are also demanding a transition to renewable energy.  Utilities are responding.  In December 2018, Xcel Energy became the first US utility to going to carbon-free energy sources (80 percent by 2030, 100 percent by 2050). However, the transition isn’t fully embraced by utilities, echoing the Republican position that going to 100 percent renewable energy is impossible and too expensive.

However, investment in renewable energy is starting to pay large dividends.  In 2017, solar and wind industries were creating jobs 12 times faster than the entire US economy, and more than 500,000 jobs globally.  However, the majority of those jobs were created in Asia, partially because of government investment in renewables. In April, the US Bureau of Labor Statistics predicted that wind and solar jobs would be among the fastest in employment growth from 2016-2026. If the Green New Deal were to be implemented, the job growth would be potentially exponentially more. The investment would payoff rapidly with the economic boom, long-term and well-paying employment, and tax revenue. 

So, while the Green New Deal may not happen now, the transition to a renewable energy infrastructure is already happening. The question is, will we be able to move fast enough to mitigate climate change without something as ambitious as the Green New Deal?