S&P Global Market Intelligence ($):

New Mexico’s recently bolstered renewable portfolio standard, or RPS, is expected to be a major driver as Market Intelligence estimates over 10,000 MW of renewable capacity installed in the state by 2030. Aggressive state renewable legislation, the expected participation in the Energy Imbalance Market, or EIM, corporate renewable demand, and a climate that supports utility-scale wind and solar power plants make New Mexico a popular destination for renewable developers through the next decade.

In March of 2019, New Mexico’s state Senate passed Senate Bill 489 increasing the state’s RPS from 20% to 50% by 2030, 80% by 2040 with a goal to reach 100% carbon-free by 2045. This is a significant increase to their previous RPS which was set at 20% by 2020. Eligible technologies include solar, wind, geothermal, hydropower, fuel cells not powered by fossil fuels, biomass, landfill gas and anaerobic digested waste biomass.

The 847-MW San Juan coal plant is scheduled to close in 2022 and the bill allows Public Service Co. of New Mexico, or PNM, a subsidiary of PNM Resources Inc., to securitize the costs of the closure. PNM has stated they plan to phase out coal generation entirely by 2031. The legislation permits the utilities to retain zero carbon resources in their generation portfolios until Dec. 31, 2047. Zero carbon resources, which would include nuclear power plants, are defined as generation assets that do not produce carbon dioxide emissions.

In terms of compliance to their previous RPS obligations, New Mexico utilities have largely fallen short in recent years with qualifying utilities reaching only 83% of their overall RPS requirement in 2017. The previous legislation included carve-outs for wind, solar, biomass and distributed generation and utilities fell short in every technology.

The state has an impressive pipeline to help make up this shortfall with over 5,000 MW of wind projects and 1,000 MW of solar projects in various stages of development. The pipeline for wind is particularly front-loaded with over 3,600 MW of capacity planned to come online between the end of 2019 and 2021. Solar projects are a little more spread out with almost 600 of the 1,000 MW planning to come online in 2022. Current estimates project in-state renewable builds surpassing 10,000 MW by 2030. As is the case in many regions across the country, transmission and distribution access will be a consistent concern over the next five years as thousands of megawatts of wind and solar projects undoubtedly located in remote locations across New Mexico are expected to come online.

New Mexico’s newly implemented aggressive RPS, its aim to boost their participation in out-of-state markets, abundant land availability and favorable climate for wind and solar energy will make it one of the country’s most popular markets for renewables over the next ten years and beyond.

More ($): Over 10 GW of renewable capacity expected in New Mexico by 2030