March 9, 2020

Natural gas will play a big role in state’s energy transition

CC 3.0 Joshua Doubek

Flaring gas at night.

We are one year into the Energy Transition Act, and utilities across the state are now charting their courses towards carbon-free generation. The goal is to meet demand for electricity with 100 percent “zero-carbon” sources by 2045 for investor-owned utilities and 2050 for electric cooperatives.

Renewable energy is now cost-competitive with other sources of power generation like coal and nuclear; and investments in renewable energy projects have steadily grown in New Mexico, which is rich in both wind and sun.

But renewables don’t produce energy as reliably as coal, and utilities say that poses a big problem for delivering electricity to customers when the wind isn’t blowing, or the sun isn’t shining. So, they’ve turned to natural gas to supplement power needs while bringing more renewables online, touting it as a crucial stepping stone in the transition to renewables.

The problem, many clean energy advocates argue, is that natural gas isn’t actually clean, and that expanding natural gas runs counter to the goals of reducing greenhouse gas emissions.

Renewables are ramping up in NM

The use of renewables has been steadily growing in New Mexico, guided by the state’s Renewable Energy Act of 2004, which established our Renewable Portfolio Standard (RPS).

Renewables accounted for about a quarter of electricity generated in the state in 2018, but the majority of that was delivered to utility customers out of state. Still, utilities are expanding renewable energy within their own generation portfolios.

Xcel Energy, one of the investor-owned utilities operating in New Mexico, pledged to reach 80 percent carbon-free electricity by 2030 across its entire footprint, Wes Reeves, senior media relations representative for Xcel Energy, told NM Political Report.

“Xcel Energy has long been a top U.S. provider of wind energy,” Reeves said, adding that the company was “an early advocate of reducing carbon emissions.”

“We have been purchasing wind energy under contract, and also from the market, for our New Mexico and Texas customers since 1999,” he said.

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PNM, another investor-owned utility, is sourcing about 22 percent of its energy from renewables at present, in keeping with the state’s current RPS requirement that 20 percent of electricity be provided by renewables by 2020.

The Energy Transition Act gave electric cooperatives an additional five years to reach 100 percent carbon-free generation. But surprisingly, the rural cooperatives seem to be further along in the transition than some of the investor-owned utilities.

“At this time last year, we were scratching our heads about how we’re going to meet that,” said Keven Groenewold, CEO of the New Mexico Rural Electric Cooperative Association. “But things have changed so much in the last year.”

NMRECA members purchase their power from two providers, Western Farmers Electric Cooperative and Tri-State Generation and Transmission, Groenewold said.

“Western Farmers will be 50 percent renewable by 2023,” Groenewold said. “That’s not just here in New Mexico, that’s across their entire systems.”

And earlier this year, Tri-State announced its Responsible Energy Plan, which will see it providing 50 percent renewable energy by 2024 to the eleven cooperative customers it has in New Mexico.

Even the independent cooperatives, like Kit Carson in Taos County, are quickly integrating more renewables into their systems, said Louise Martinez, Director of the Energy Conservation and Management Division at the Energy, Minerals and Natural Resources Department.  

“Kit Carson is already looking at having 100 percent daytime solar power by 2022, and they’re planning further upgrades to their system,” Martinez said.

In 2017 — the most recent data year available for electricity consumption in the state — about 27 percent of electricity consumed was generated from renewable sources, Martinez said. Of that renewable energy consumption, 76 percent wind generated, and 24 percent came from solar.

Natural gas as a ‘bridge’ to renewables

With more renewables generating electricity in these systems, utilities say the need for a low-carbon reliable energy source is growing. Over the past few years, the energy sector has championed natural gas as an efficient and low-cost complement to adding more renewable energy to electricity systems while waiting for battery storage and other reliability technologies to further develop.

“You don’t build resources as lego blocks,” said PNM spokesperson Ray Sandoval. “These are jigsaw puzzle pieces. In the past, you had coal and natural gas, and those kinds of baseload power, and you could actually switch out source to source. Now, we have renewables such as solar and wind and battery, you really don’t have the option to stack them like legos. You need the right jigsaw piece.”

Sandoval said PNM hopes to include new natural gas turbines as part of its energy generation mix to support renewables and replace some of the power generated at the San Juan plant.

“Literally, these are jet engines. One goes to a 747 and the other goes to a power plant,” Sandoval said. “What’s great about these is that they ultimately complement renewables very well. As the cloud moves over the solar panel, you rev up that jet engine and you create electricity. And as the cloud dissipates and you get solar again, you rev the engine back down.”

But natural gas isn’t ‘clean’

Clean energy advocates worry that expanding natural gas infrastructure at a time when the United Nations’ IPCC is calling for a more rapid transition away from carbon-emitting fossil fuels will lead to what Lila Holzman calls a “climate breakdown.”

Holzman, the energy program manager for shareholder advocacy nonprofit As You Sow, is co-author of a recent report scrutinizing utilities’ reliance on natural gas as a “bridge” to renewables.

Coal plant closures, like in the case of the San Juan Generation Station, are being driven primarily by markets, not renewable energy mandates. Most, if not all, utilities have increasingly turned to natural gas to replace coal as plants continue to close across the country.

“In the U.S., hydraulic fracturing has enabled very cheap natural gas production — much cheaper than what was anticipated maybe five years ago,” Holzman said. “As natural gas was able to compete much better with coal, utilities realized they need to get off coal.”

That shift in the market coincided with a rising tide of concern around greenhouse gas emissions, and especially carbon emissions coming from coal. Natural gas, which emits about half as much carbon as coal does, emerged within the energy industry as a reliable fuel source for electricity generation that’s “cleaner” than coal.

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Subsequently, utilities began to champion natural gas investments as a bridge to renewables: a lower-carbon energy source that can support industry-scale renewables until a better technology comes along.

“Though natural gas is a lower carbon emitter than coal, it’s still a significant carbon emitter on its own, and that’s before you start doing all the math around the incredibly dirty process of getting natural gas out of the ground,” said Ben Shelton, political and legislative director of Conservation Voters of New Mexico. “No matter how efficient these turbines are, or how cheap you can get them — there is a huge hidden climate impact of natural gas, beyond just burning it as fuel.”

Getting off the bridge

So how can the state transition away from natural gas? The question has proven to be a difficult one to answer. For one thing, there isn’t any clean source of energy that utilities say could easily replace natural gas in their systems today.

The utilities interviewed for this story seemed to agree on one point: phasing out natural gas is a question of “if” not a “when.”

“I wouldn’t say we’re looking at phasing out natural gas,” Lee Boughey, senior manager for Communications and Public Affairs for Tri-State Generation and Transmission, told NM Political Report. “At the scale that Tri-State operates, natural gas serves that role of balancing out renewables. Utilities need to have a resource that they can dispatch, that they can turn on or turn up when those power needs demand it. Right now, natural gas fills that role.”

Boughey said there are a number of emerging technologies that could offer alternatives to natural gas, if they can meet the reliability needs.

“In the future, different types of energy storage could fulfill that role and help support the goals of moving towards lower carbon. There are a lot of opportunities ahead, and we’re looking at those opportunities,” he said.

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PNM is similarly exploring new technologies that could eventually replace natural gas. Tom Fallgren, SVP of generation at PNM, pointed to carbon sequestration as one possible option.

“In general, we would say that carbon capture is still in its development stages,” Fallgren told NM Political Report, but added that the prospects for carbon capture on a gas plant may be better than that of a coal plant.

“A gas plant has significantly less carbon dioxide to begin with, so whatever you’re putting on there can be a smaller size,” he said.

But with no clear replacement for natural gas, a big part of utilities’ transitions to carbon-free electricity will rely on natural gas until something better comes along.

“We have until 2040 to further develop that carbon capture technology,” Fallgren said. “Really, we have almost two decades to refine that technology to something that works.”