With a robust solar energy and natural gas portfolio, El Paso Electric expects to wean itself from coal in 2 years, providing cleaner power to its 395,000 residential and commercial customers in Texas. By the end of the year, solar energy will represent 6 percent of EPE’s generation sources, compared to 0.23 percent nationally.
EPE signed a 20-year power purchase agreement (PPA) with the Macho Springs solar plant in New Mexico, on 500-acres of State Trust Land in Luna County. The 50 megawatt project supplies enough power for 18,000 homes and will displace more than 40,000 metric tons of CO2. Macho Springs was touted as a super cost-effective solar energy development, at a mere 5.79 cents per kilowatt-hour, and will be the largest in New Mexico. This is significant because the project is selling solar energy for about half of what is typical for such a project and for nearly the price of coal power — but with a 20-year purchase agreement.
In addition, EPE signed a 30-year power purchase agreement with Newman Solar to build a 10 megawatt solar plant in El Paso, which should be online at the end of 2014. The utility also has a PPA with the Camino Real Landfill Gas to Energy facility, which plans to increase capacity from 1.5 megawatts to 3 megawatts in 2015. EPE also plans to sells its 7 percent share (108 megawatts) in the coal-fired Four Corners Power Plant by its retirement date in 2016, making the utility coal-free.
“Our commitment to building a portfolio that includes renewable energy technologies in order to complement our local, clean burning natural gas units help make overall power in our region dependable, safe and cleaner,” says Tom Shockley, CEO of EPE. “We continue to look for opportunities to add cost effective solar energy, such as the Newman Solar project, which in the long run helps reduce emissions and provide cleaner air. EPE is at the forefront in the solar energy industry, which is fitting given our location and abundance of the solar resources. We continue to look for the most cost-effective and reliable resources for our customers which today is led by natural gas resources that support and enable us to expand our solar portfolio.”
In a move that EPE says will complement solar energy, it is building Montana Power Station, a four-unit natural-gas fired power plant in El Paso. It will be online to meet peak power demand in the summer of 2015. Natural gas and solar power plants work well together because natural gas power plants, unlike coal power plants, can ramp up and down relatively easily. Natural gas can thus ease some of the indeterminacy issues associated with solar power by providing electricity as it is needed.
EPE’s move away from coal power will help it comply with proposed new rules set by the EPA to reduce carbon emissions from power plants by 30 percent. Under the new rule, coal will be disproportionately impacted — due to its large carbon emissions. In 2013, coal generated 39 percent of the all U.S. electricity, with solar generating almost 0.25 percent. EPE is showing bold leadership as a low-carbon utility by its use of solar energy, coupled with phasing out coal power.
Given the solar energy potential of the region, finding cost-effective sources of solar energy with long PPAs provides certainly and reliability to its energy portfolio and hedges against potential price increases from future regulatory changes.
“Our west Texas and southern New Mexico region has the right kind of sun for optimal solar energy production, making this region the ‘goldilocks’ in terms of climate, humidity and heat characteristics that allow us to expand our renewable portfolio with cost-effective technologies and reliable energy resources,” says Shockley. “With over 300 days of sunshine every year, we are in the perfect region for solar energy technologies, which in the long run reduces carbon emissions and provides cleaner air.”
Image credit: Sun Edison
Sarah Lozanova is a regular contributor to environmental and energy publications and websites, including Mother Earth Living, Green Building & Design, Triple Pundit, Urban Farm, and Solar Today. Her experience includes work with small-scale solar energy installations and utility-scale wind farms. She earned an MBA in sustainable management from the Presidio Graduate School and she resides in Belfast Ecovillage in Midcoast Maine with her husband and two children.