Committing to Renewables in New Mexico

New Mexico is at a crossroads. As recently as 2011, more than 70 percent of in-state power generation came from coal; since then, three coal units have retired, with another 4 planned for closure in the coming years. Economics are simply not in their favor.

But while the decline of New Mexico’s coal industry is inevitable, the composition of resources that will replace it is not. The state’s largest electric utilities are proposing a steadily increasing dependence on natural gas, which, while cleaner than coal, is still a fossil fuel—and not the cheapest option.

New analysis by the Union of Concerned Scientists reveals that renewable energy, not gas, is the state’s lowest-cost long-term solution. A strengthened renewable portfolio standard (RPS) would help ensure the transition to clean energy actually takes place.

Renewable energy in New Mexico

New Mexico enjoys some of the best potential for renewable energy in the country. Recent large-scale investments in wind and solar illustrate how those resources are already cost competitive and technically feasible (see, for example, Kit Carson’s commitment to 100% solar, or Xcel’s plan to build 1,230 megawatts of wind).

But the vast majority of New Mexico’s clean energy potential remains untapped. Without stronger policies to guide them, major utilities are planning to develop more and more gas, at the expense of both renewables and ratepayers. Such a buildout could lead to either prolonged dependence on gas, or large-scale underuse and abandonment of gas infrastructure.

UCS modeled a series of future energy scenarios, both with and without increases to the state RPS. We found:

• The least-cost future is dominated by wind and solar—underscoring the need to prevent over-investment in gas
• Strengthening the RPS (50 percent renewables by 2030, 80 percent by 2040) would, by 2030, create several thousand jobs in construction, operations, and maintenance
• Under a strengthened RPS, most monthly electric bills for most households will actually be lower than they were in 2016.