Energy Efficiency and Renewable Energy Resources · 2014-06-27 · Energy efficiency and renewable...

New Mexico’s Natural Resources 35

Energy Efficiency andRenewable Energy Resources

Energy efficiency and renewable energy technologies should be important elements of a diverse energy portfolio forNew Mexico. Energy efficiency can reduce the rate of growth in the state’s energy demand, lower consumer utilitybills, and strengthen local economies by freeing up dollars for other needed goods and services. Renewable energytechnologies can contribute to supply diversification, help protect the environment, and provide a hedge against theprice volatility of conventional fuels. Together, energy efficiency and renewable energy technologies have significantpotential to enhance the energy security of New Mexico and our Nation.

Energy EfficiencyOVERVIEW

Energy efficiency technologies arecost-effective, commercially avail-able, and are an important part of thesolutions to our energy needs. Thesetechnologies can be implementedswiftly to address the current energysituation. Energy efficiency tech-nologies generate savings from thedate of installation through theuseful life of the product. Since thetragic events of September 11, 2001,it has become all too apparent thatour current system of energy supplyis extremely brittle. Large centralstation power plants, oil and gaspipelines, and the electricity gridrepresent potential terrorist targetsand are thus vulnerable to disruption.Energy efficiency cannot be de-stroyed by acts of war.

Energy efficiency is a demand-sideenergy resource. Sound energypolicy recognizes that it is theequivalent of an energy resource

readily available to virtually everyconsumer. The logic derives fromthe following equation: 1 barrel ofoil saved = 1.4 barrels of oil earned.The additional oil earned can beattributed to the fact that it takesenergy to produce and deliverenergy. Energy not used does nothave to be produced and delivered.

Both energy efficiency and conser-vation are important resources to tapinto in times of a crisis. However,they are distinctly different. Conser-vation is largely dependent onbehavior. Consequently, it cannot berelied on for a long time. On theother hand, energy efficiencytechnologies can reliably save asmuch energy as many power plantsproduce.

• The cheapest megawatt is one thatis not built.

• The least expensive kilowatt-houror therm is one that is not used.

• Energy efficiency is the cheapestenergy that money can buy.

• Energy conservation is the cheap-est energy money cannot buy.

Perhaps the biggest and most costlymyth in the business world is thatenergy represents a fixed operatingcost. Fortune 500 companies in theenergy service industry have madesignificant profits destroying themyth. Technology-driven energysavings are so predictable andreliable that banks routinely lendmoney for the purchase of theseproducts, knowing that they will alsoprofit from the energy savings. InNew Mexico, energy service compa-nies (ESCO) have implemented over$21 million of energy efficiencyprojects in public schools, savingover $3.5 million per year. Theseprojects improved the learningenvironment for students andreduced the operating cost of schoolsfor the taxpayer. Lenders now offer

36 Energy, Minerals and Natural Resources Department

energy efficiency mortgages andrelax qualifying requirements basedon the understanding that lowermonthly energy bills increasehomeowner disposable income andimprove the probability of makingmortgage payments.

• Energy efficiency is profitable andincreases disposable income.

• Energy efficiency technologiesempower users to control energycosts.

There are generally no regretsassociated with implementing energyefficiency measures and renewableenergy technologies. The corre-sponding economic and energysupply benefits are valuable in andof themselves, thereby supplement-ing the environmental attributes.Energy efficiency and renewableenergy technologies are the best bet,especially over the long term.

ECMD PROGRAMACCOMPLISHMENTS

The Energy Conservation andManagement Division (ECMD) ofthe New Mexico Energy, Mineralsand Natural Resources Department(EMNRD) has statutory responsibil-ity for planning and implementingenergy efficiency projects as well asthose involving renewable or alterna-tive energy resources. With respectto energy efficiency, ECMD focuseson identifying opportunities andapplying Division resources to attainimprovements in state, tribal, andlocal government facilities, publicschools, institutions of higherlearning and in private commercial

buildings and residences throughoutthe state. In general, the greater thefacility’s energy consumption, themore promising the opportunity tominimize waste and improve effi-ciency. ECMD saves State agenciesand public schools over $5 millionper year through its energy effi-ciency and renewable energyprograms—a cumulative total ofover $25 million in the last fiveyears alone, as indicated in Figure 1.The Division administers a numberof other programs that also result insignificant savings to the taxpayer;these programs, along with specificaccomplishments in 2001 arediscussed below. Additional infor-mation about our Division’sactivities can be obtained from theEMNRD-ECMD website,http://www.emnrd.state.nm.us.

A few highlights of ECMD’s EnergyEfficiency initiative are as follows:

• Secured approximately $510,000in federal [U.S. Department ofEnergy] grants for renewableenergy, alternative transportationand energy efficiency projects in

New Mexico. Projects includefunding for purchase of com-pressed natural gas (CNG) shuttlebuses for University of NewMexico ($200,000); Land ofEnchantment Clean Cities Coordi-nator ($25,000); revision andupdate of building energy codes($115,461); Rebuild New Mexicoenergy efficiency program($150,000); and assessment ofwind energy ($10,000) and distrib-uted generation ($9,500) potentialin New Mexico.

• Established and facilitated theactivities of the New MexicoSustainable Energy Collaborative(NMSEC). NMSEC’s objective isthe pursuit of cleaner, moreefficient energy development anduse through a cooperative, collabo-rative approach. Over 90individuals, representing privatebusinesses, universities, govern-ment, Indian tribes/pueblos,national laboratories, environmen-tal groups, and trade organizations,are currently participating inNMSEC activities. In August2000, the Collaborative filed

Figure 1. ECMD-Managed Energy Programs Saved Over$25 Million in the Last Five Years


comments in response to the NMPublic Regulation Commission’sNotice of Inquiry on RenewableEnergy as a Source of Electricity.

• Conducted public information,education and outreach activitieson renewable energy, alternativetransportation, and energy effi-ciency at UNM’s Earth DayCelebration (April 2001); TaosSolar Festival (June 2001); NewMexico State Fair; the NewMexico Solar EnergyAssociation’s Solar Fiesta (Sep-tember 2001); Border EnergyForum VIII (October 2001); andthrough direct technical assistanceby phone, e-mail, and office visits.

State Government Energy Manage-ment Program. Under GovernorJohnson’s Executive Order #99-40,“Energy and Water Conservation inState Government,” Cabinet-levelState agencies are directed to reducetheir energy consumption by 4% byJune 30, 2002. This order directsState agencies to conserve energyand water through various mecha-nisms (e.g., development of energysaving plans; appointment of energymanagers within each agency). Asthe lead agency tasked with imple-mentation of this Executive Order onenergy efficiency, ECMD providestechnical and financial assistance inimproving the energy performanceof over 1,000 state-owned andoperated buildings. Compliance isbeing facilitated by the New MexicoShort-term Energy ConservationStrategy, January 2001, whichECMD developed at the request ofGovernor Johnson in a cooperativeeffort with other western states toreduce energy usage.

Insulation, radiant heating, skylighting and efficient lighting -Highway Department Maintenance Building. Source: ECMD

A major function of ECMD has beento track and document State agen-cies’ energy expenditures. To assistin this effort, the Division maintainsa state utility bill database thatcontains nearly 1,700 gas andelectric accounts. The data is pro-vided by approximately 30 utilitycompanies from across the state.Significantly, ECMD’s utilitydatabase facilitates the timelyreporting of energy usage and costs,thereby furnishing important feed-back to State agencies in evaluatingtheir compliance with ExecutiveOrder #99-40. Energy consumptionfor Cabinet-level state agencies hasbeen reduced by 17.5% based onthe most currently available datafrom ECMD’s tracking system.

Of historical note, the New Mexicoutility bill database was developed in1993 by ECMD to implement thefirst State executive order on energyefficiency. It is one of the largest andlongest running energy monitoringdatabases operating in the country.As a result of the experience gained

with this database, ECMD recentlyprovided technical assistance to theCity of Albuquerque and the Albu-querque Public School District insetting up their own energy monitor-ing programs. Tracking of energyconsumption trends will becomeeven more important as electricityrestructuring is implemented and theprice of energy reflects more accu-rately how and when we use it.

Energy consumption within Cabinet-level State agency buildings in FY1999 was reduced by 17.7% over theFY 1998 base year, exceeding the4% saving goal established in theOrder. Electricity and natural gasconsumption dropped 6.2% and17.5%, respectively; no adjustmentshave been made for weather and costof fuel. These savings representenough electricity to operate over1,000 New Mexico homes for oneyear; and enough natural gas toannually heat the homes of over1,800 New Mexicans. The electricitysaved has reduced power plantemissions by 5,605 tons of carbon


dioxide, 16 tons of sulfur dioxide,and 18.2 tons of nitrogen oxides.The utility bills for 13 Cabinet-leveldepartments during FY 1999 totaled$8.9 million ($7.35 million forelectricity and $1.55 million fornatural gas).

Several agencies have exceededexpectations in reducing energyconsumption and costs. For example,the Health Department improved theefficiency of its facilities throughoutthe state with energy awareness,strict reporting, lighting improve-ments, and water conservationefforts—all without any fundingfrom ECMD for energy efficiencyretrofits. The Health Department,New Mexico’s largest State agency,reduced in energy usage by 39.1%and was responsible for 53% of thetotal savings achieved under Execu-tive Order #99-40. The CorrectionsDepartment also achieved a signifi-cant 28.3% energy savings. TheHighway and Transportation Depart-ment implemented an efficiencyprogram that created $5 of savingswith every $1 provided by ECMDfunding for energy retrofits. TheHighway and Transportation Depart-ment leads all departments in totalsavings since the program wasinitiated in 1993. Over $230,000 infederal funds was used to purchasethe energy efficiency, water conser-vation and solar photovoltaic (PV)equipment in New Mexico StateParks. These State Parks effortshelped EMNRD reduce its energyconsumption by 7.1%.

Public School Construction PlansReview. ECMD reviewed 94 plansfor new construction or renovationof New Mexico public schools

totaling $139 million in constructioncosts during FY 2001 to ensurecompliance with applicable energycodes and standards. These technicalcompliance reviews, conductedunder an agreement with the StateDepartment of Education, resulted insignificant energy cost savings fortaxpayers and in better, more com-fortable learning environments forteachers and students. On average,application of these standards resultin efficiency gains of 10%. How-ever, the increased electricityconsumption trend toward refriger-ated air-conditioning overevaporative cooling that began in2000 continues; the AlamogordoSchool District reported that theirutility bills had doubled for oneschool facility where refrigerated air-conditioning was installed whencompared to facilities using evapora-tive cooling. ECMD also continuesto provide similar plan reviews forhomebuilders, with over 69 buildersand contractors being given directtechnical assistance in filling outtheir energy code compliance forms.

The Public Facility Energy Effi-ciency and Water Conservation Act.ECMD provided support in amend-ing the Act to make it easier for stateagencies, counties and municipalitiesto enter into energy saving perfor-mance contracts; the amendmentswere included in House Bill 405.Since the Act was amended, ECMDhas reviewed and approved a $2.3million energy performance contractfor Eastern New Mexico University(ENMU). ENMU will save $308,951per year, representing a 33.7%reduction in annual energy expendi-tures. This latest contract is inaddition to over $25 million in

similar New Mexico energy perfor-mance projects that schools,universities, and local governmentshave implemented over the last 8years. These projects amount totaxpayer savings of more than $4.2million per year. Similarly, ECMDprovided technical and administra-tive support of successful passage ofSenate Memorial 15, urging coop-erative efforts to increase energyefficiency and the use of renewableenergy.

The Act also provides a mechanismfor energy service companies(ESCOs) to determine the technicaland economic feasibility of energysaving measures for government-owned facilities. A significantadvantage of utilizing the Act’sprovisions is that State governmentagencies do not have to make up-front payments to ESCOs forinstallation of energy saving prod-ucts and equipment; moreover, theestimated savings are guaranteedwith a performance bond. ESCOsrecover their costs from energysavings realized over a maximumperiod of 10 years. Any additionalsavings accrue to the contractingagency and ultimately to taxpayers.ECMD has statutory responsibility toreview the proposed energy perfor-mance contracts and to work withagencies to get the best possibleprojects.

Rebuild America/Rebuild NewMexico Program. Over 59 busi-nesses and government entities, withover 42.4 million square feet ofbuilding space, are participating aspartners in this program to improveenergy efficiency and reduce facil-ity-operating costs. Program energy


audits have identified potentialsavings of more than $750,000 peryear for 12 major Rebuild part-ners. Through the program, ECMDoffers walk-thru audits, energyinformation and workshops, third-party review of energy proposals andother technical assistance. From2000 to early 2001, ECMD alsomanaged a Rebuild New Mexicoproject involving 31 at-risk youth inAlbuquerque and at Taos Pueblowho were taught the basics of energyefficiency and how to implementlow-cost efficiency measures. Thestudents learned about energy issuesand policy, as well as the technicalaspects of lighting, heating, air-conditioning, ventilation andweatherization. The New MexicoYouth Conservation Corps programfunded this innovative energyefficiency project.

Pollution Prevention Programs.ECMD provided for the training ofapproximately 80 oil and gas indus-try personnel on the PollutionPrevention Best Practices Manualdeveloped with the EMNRD OilConservation Division. Otherpollution prevention accomplish-ments included participation in theGreen Zia Environmental ExcellenceProgram, serving in the roles ofexaminer, judge and P2 AdvisoryCouncil member; and continuedfunding to New Mexico StateUniversity for operation of thePollution Prevention TechnicalResource Center in Albuquerque.These programs provide technicalassistance to governmental agencies,non-profit organizations, and busi-nesses to improve solid wastemanagement and encourage adoptionof “best practices” in the areas of

pollution prevention and energyefficiency.

Transportation Efficiency – Alter-native Fuels. The goal of the ECMDTransportation Program is to reducethe use of petroleum-derived fuelsand our dependence on imported oil.New Mexico’s transportation sectoraccounts for over a third of allenergy consumed in the state. In thelast year we have seen our gasolineprices increase. In comparison to thefuel price paid by consumers in othercountries, New Mexico’s energyprices for transportation fuels suchas gasoline and diesel still remainrelatively low. Costs associated withdelivery of transportation fuels suchas military expenditures for main-taining our overseas oil supply linesareultimatelypaidthroughtaxes.NewMexico

has been a leader in promotingenergy efficiency in transportationsince the 1970s when the Arab oilembargo and subsequent priceincreases prompted Congress tocreate the Department of Energy(DOE) and programs to reduce ourcountry’s dependence on foreignsources of oil by establishing federaland state partnership programs topromote energy efficiency. EMNRDadministers the DOE State EnergyProgram that includes funding andpromoting the use of alternativefuels in transportation.

Transportation strategies and federalregulations have guided efforts toincrease the use of alternative fuelsthat include CNG, propane, E-85(ethanol-gasoline blend), liquefied

Table 1. Acquisition of State Alternative Fuel Vehicles

Natural gas bus and alternative transportation - City of Santa Fe. Source: ECMD


natural gas (LNG),and electricity.Prompted by thefederal EnergyPolicy Act(EPACT), NewMexico enacted legislation known asthe Alternative Fuels Conversion Actand developed an energy policy goalto increase use of New Mexico’sown energy resources in meetingstate and federal mandates forreducing our dependence on foreignenergy sources. With an aggressiveapproach starting in 1992, the statehas consistently reported to DOEthat it is in compliance with thecurrent EPACT mandate that 75% ofall state vehicles acquired be capableof operating on alternative fuels. Theannual reporting to DOE of thenumber of alternative fuel vehicles(AFVs) purchased indicates that weare increasing acquisitions and are inan ideal position to maintain compli-ance status for the foreseeable future.One of the most successful alterna-tive fuel projects funded by theAlternative Transportation Programis the University of New Mexico’s(UNM) public access compressednatural gas station constructed onUNM’s campus. This project was amodel public-privatepartnership that broughtthe City of Albuquerque,Public Service Companyof New Mexico (PNM),UNM and EMNRD towork together to makethis project a success. Thepublic access station isavailable for use by Cityof Albuquerque AFVs,state fleets and theUNM’s Park & Rideshuttles. UNM has also

acquired the newest CNG enginetechnology with the purchase of fourJohn Deere CNG-powered buses thathave proven alternative fueltechnology’s dependability. Theconvenience of the CNG station oncampus and the effective operationof the new CNG buses haveprompted UNM to request and applyfor federal financial assistance todefray the incremental cost differ-ence to purchase an additional fiveCNG buses for their fleet.

Public transit agencies and park andride programs in New Mexico areexamining alternatives to conven-tional diesel buses. The City of SantaFe (Santa Fe Trails), the City ofAlbuquerque (Suntran), the City ofEspanola and UNM Park & Rideshuttles have successfully introducedclear alternatives, primarily CNG,into daily fleet operations. Throughthese efforts approximately 811,372gallons of diesel fuel are displacedon an annual basis.

Table 2. Number of Transit Vehicles and CNG Used

ECMD also provided funding andadministrative assistance to the Cityof Las Cruces in the development ofa publicly accessible CNG fuelingstation in that community. The LasCruces CNG station is scheduled tobe operational in early 2002. Addi-tional assistance has been providedto the Belen, Los Lunas, and WestLas Vegas school districts in con-verting their buses to CNG.

To assist transit agencies and com-munity leaders, DOE has fundedstudies that confirm natural gasbuses emit significantly fewerpollutants than their diesel counter-parts. CNG buses are currently moreexpensive to purchase than diesel,but fuel cost comparisons show thatnatural gas is cheaper than gasolineand diesel. Natural gas offersapplicability to future technologies,including hybrids and fuel cellsbecause it can be used as a feedstockfor hydrogen, a promising energysource for fuel cells. Investing in

Table 3. Transportation Program Projects, 2000-2001


natural gas infrastructure can there-fore pave the way to futuretransportation applications.

New Mexico is also home to manyE-85 (flex-fuel) vehicles that areunable to use the alternative fueluntil it becomes available. ECMDhas selected the National EthanolVehicle Coalition to work withfederal agencies, state agencies andthe private sector to establish 5 to 7public E-85 fueling sites includingAlbuquerque, Los Alamos and SantaFe.

The ECMD Alternative Transporta-tion Program in the last year hasfocused on assisting public transitagencies with their alternative fuelefforts and in developing NewMexico’s CNG and E-85 alternativefuel infrastructure. ECMD hasworked to encourage partnerships

Figure 3. Alternative Fuels Vehicle Service & RepairFigure 2. Alternative Fuels Infrastructure

Figure 4. Alternative Fuels Fleet Locations

that enhance theprogram’s goal,applied for federalSpecial Projectfunding to leveragesupport for plannedprojects, and contin-ued to providefunding for alterna-tive fuel training thatis crucial to theunderstanding andcontinuing expan-sion of alternativefuel infrastructure.

New Mexico Mapsshowing alternativefuel infrastructure,vehicle service andrepair, and stationlocations can befound in figures 2, 3,and 4, respectively.


NEW MEXICO ENERGYCONSUMPTIONLANDSCAPE –OPPORTUNITIES TOIMPROVE EFFICIENCY

New Mexicans are squeezed economically byhigher-than-average costs per unit of energyand by our lower-than-average disposableincome. Annual energy expenditures in thestate are $1,983 per capita. Our average netdisposable income after energy costs are paidis $18,398 compared to $23,707 nationally –a significant $5,309 less than the nationalaverage. The economic squeeze increasedsignificantly from $4,276 in 1997 to $5,243 in1999. See Figure 5. The residential sector inNew Mexico consumes 15% of the totalenergy in the state compared to 19% for theNation. Residents of New Mexico are veryresource-efficient through use of evaporativecooling for their homes and burning of woodfor heating and cooking. We consumed177,000 cords of wood in our homes in 1995.Very few new houses are built with refriger-ated air-conditioning. Cooling withevaporative coolers costs one-third to one-fifth less than cooling with compressor-drivenrefrigerated air-conditioning. However, thereis a significant trend towards refrigerated air-conditioning. New Mexico ranks 23rd in percapita energy consumption and 37th in percapita energy expenditures. See Table 4. Atypical New Mexican’s gasoline expendituresare also higher than in surrounding states and

Figure 5. New Mexico Economic & Energy Squeeze: Annual NetDisposable Income Per Capita

Table 4. NM Rankings in Per Capita Energy Consumptionand Expenditures, 1999

Figure 6. NM Gasoline Costs Per CapitaCompared to Other States, 1999

Table 5. New Mexico Energy Prices ($/Million BTU) (1999) - Final Cost to Customer


nationwide. New Mexicans spent, onaverage, $634 for gasoline in 1999compared to $547 nationally. SeeFigure 6. The unit price paid forelectricity in New Mexico is veryclose to the national average. How-ever, Colorado, Texas and Utah paysignificantly lower rates for electric-ity. Consumers in New Mexico paymore for natural gas than consumersin Texas, but pay less than theremaining surrounding states. SeeTable 5. The largest payments forenergy—over $1.95 billion per yearstatewide—are for petroleumproducts such as gasoline, liquefiedpetroleum (LP) gas, and diesel fuels.Electricity purchased by end userscost New Mexicans over $1.16billion in 1999. See Figure 7.

Energy consumption for exportedelectricity was 19.4% of the totalenergy consumed by all sectors inthe state. See Figure 8 and Table 6.Over 46% of the energy input toelectric utilities was exported out ofNew Mexico. See Figure 9. NewMexico appears to be just as indus-trialized and commercialized as theNation from an energy consumptionstandpoint. In New Mexico, 32% ofthe energy goes for industry com-

Figure 7. Total Energy Expenditures, 1999 Figure 8. New Mexico Energy Consumption, 1999

Figure 9. Energy Input to Electric Utilities andElectricity Destination, New Mexico, 1999

Table 6. New Mexico's 1999 Consumption of Energy Resourcesin Trillions of BTUs


pared to the national average of37%. Commercial energy consump-tion is slightly higher that thenational average. However, a higherproportion of energy (36%) is usedin transportation compared to 28%for the nation. On the other hand,New Mexico uses a lower proportionof energy (15%) in the residentialsector. See Figure 10.

RECENTDEVELOPMENTS -ENERGY PRICE ANDSUPPLY AWAKENING

Americans consumed almost 20million barrels of oil per day during2000, of which almost 60 percentwas imported. Almost half of theseimports were from member nationsof OPEC, the Organization ofPetroleum Exporting Countries.Twenty-two percent originated in thePersian Gulf region. In recent years,Mideast crude oil reached $38 perbarrel on occasion (excluding thecost of maintaining a militarypresence to safeguard the resource).These facts speak to our substantialdependence on foreign energy andits seemingly inherent price volatil-ity.

Clearly, energy is an operating costof our Gross National Product. Whenthat cost increases dramatically, as itdid between 1998 and 2000 when theaverage purchase price of a barrel ofcrude oil skyrocketed from $8 tomore than $30, the results cascadethrough this Nation’s economy. Inaddition, our reliance on imported oilis a significant contributor toAmerica’s chronic balance-of-tradedeficit. During 2000, imports of

Figure 10. Energy Consumption by Sector, 1999

crude oil totaled nearly $90 billion,about 25% of the deficit.

On October 22, 2001, the U.S.Department of Energy’s EnergyInformation Administration (EIA)reported that gasoline, crude oil andnatural gas prices had decreasedsignificantly. The average worldcrude oil price was $19.48 per barrel,down $10.73 from the previous year.WTI crude oil fell to $21.99 perbarrel, down $12.32 from the yearbefore. The national average retailregular gasoline price was $l.265 pergallon, down 28.6 cents from theyear before. Natural gas prices at theHenry Hub averaged $2.71 perthousand cubic feet (Mcf), a levelmuch lower than the year before.The average spot price for naturalgas in the prior year was estimated to

have averaged about $4.96 per Mcf.Source: USDOE/EIA

In New Mexico, we saw natural gas,gasoline and other petroleum prod-ucts fluctuate significantly betweencalendar year 2000 and 2001. Forexample, the cost of natural gas forconsumers was $0.301 per therm inMay 2000. By April 2001, the pricehad increased to $0.756. Then itdropped to $0.35 per therm in August2001. [Note: A therm is equivalent to100,000 Btu.] The information isbased on prices shown in the PublicService Company of New Mexicogas billings. See Figure 11.

In New Mexico, public schools,institutions of higher education, andselected state and local governmentsreceive revenues from the sales of oil

Figure 11. Natural Gas Cost Per Therm


and gas. Each $1.00 increase in theprice of a barrel of oil brings $4million more in revenues to the state;and each $0.10 increase in the priceper Mcf of natural gas nets the statean extra $12 million. Had pricesremained high the full year, the StateTreasury may have realized arevenue increase of $297 million fornatural gas and $80 million for crude

oil, a total of $377 million. In early2001, oil and natural gas prices werenearly triple that from the yearbefore. However, energy pricesdeclined steadily throughout the yearand, as a result, revenues to the StateTreasury decreased significantly.

The big question is how the averageNew Mexico citizen will be im-

pacted. In 1999, New Mexicans paid$2.357 billion for all petroleum andnatural gas products based on thelatest available data from DOE-EIA.A reduction in price of 20% wouldincrease net disposable income by$471 million. In addition, citizenswould save an additional state grossreceipts tax of approximately $23.5million based on a 5% rate.

Renewable Energy Resources

OVERVIEW

The focus on New Mexico as aleader in solar energy has in the pastattracted private, state and federalfunding, resulting in significantbenefits to New Mexico and theNation. Recently, however, researchfunding for solar technologies hadleveled off or dropped for mostentities such as Sandia NationalLaboratories (SNL). SNL conducts a

Renewable energy sources,including solar, wind, hydro-power, biomass, and geothermal,currently provide less than 1% (or5.6 trillion BTUs) of NewMexico’s energy needs. In fact,the contribution of renewableenergy dropped from 6.6 trillionBTUs in 1997. This is contrary tothe fact that our renewable energyresource base is very large anddiverse. Table 1 provides abreakdown of consumption, bysector, for renewable energy inNew Mexico.

Table 1. Renewable Energy Consumption in New Mexico

Table 2. Renewable Energy Production by Resource, 1999

Solarwide array of solar energy research,development and demonstration(RD&D) projects involving suchtechnologies as parabolic troughsand concentrating collectors. Withthe event of September 11, 2001,Congress seems intent on restoringto historically high levels funding formost types of domestic energyRD&D, including solar energy, toenhance U.S. energy security.

The solar industry is made ofmanufacturers, equipment suppliers,greenhouse and glazing suppliers,passive solar builders, installers andservice companies that repairsystems. Most businesses marketingsolar technologies are members ofthe New Mexico Solar EnergyAssociation (NMSEA) and the NewMexico Solar Energy IndustriesAssociation (NMSEIA). InNMSEA’s 2001 Directory of Solar


Professionals, 30 architects anddesigners, 42 builders, 6 educationprofessionals, 4 engineers, 3 financ-ing institutions, 43 solar technologycompanies, 6 greenhouse designersand builders, and 25 green buildingproduct and service companies arelisted. NMSEA’s resources can beaccessed on the WEB atwww.nmsea.org or 1-888-886-6765.

In the 1980s there existed bothfederal and state solar tax credits.During the decade over 40,000active and passive solar systemswere installed in New Mexico. Whenoil prices fell and the federal taxcredit for use of solar was eliminatedon December 31, 1985, the impacton the solar energy industry wasimmediate. At the begin-ning of 1985,approximately 250 solarbusinesses were in opera-tion employing about 2,000people. By the end of 1985about 80% of these busi-nesses had closed.

The Solar Rights Act of1978 allows propertyowners to create solareasements for the purpose of protect-ing and maintaining proper access tosunlight. It also includes provisionsallowing local governments to createtheir own ordinances or zoning rulespertaining to protection of solarrights. New Mexico was first amongthe 50 states to enact solar taxincentives and a solar access law.

RESOURCES

Energy from the sun represents apotentially enormous energy source.

New Mexico experiences more than3,200 hours of sunshine per year—substantially more than most otherstates in the Southwest. NewMexico’s solar potential varies fromabout 6 to 8 kilowatt-hours persquare meter per day.

This large resource base means thepotential for solar energy in NewMexico is also great. The State’saverage daily energy consumption isabout 904 billion BTUs and isequivalent to the amount of solarenergy received on an average daywithin an 18 square-mile area. Theenergy is equivalent to 161,425barrels of crude oil. Table 3 showsthe average solar radiation forselected New Mexico communities.

PRODUCTION

Direct use of the sun’s light andthermal energy has long beenrecognized In New Mexico. Over $4million worth of energy was sup-plied by active and passive solarsystems in 1990. Although less thanfive percent of the solar installationsin New Mexico generate electricity,these photovoltaic (PV) units includea 47-kilowatt system at the South-west Regional Experiment Station atNew Mexico State University in Las

Cruces and about 250 one-kWirrigation units in various areas.Sandia National Laboratoriesestimated that there were approxi-mately 2,000 PV systems in NewMexico in 1990 and possibly asubstantial number more.

RECENTDEVELOPMENTS

Significant activities have beenconducted with alternative energy inNew Mexico over the past few years.The Energy Conservation andManagement Division (ECMD) hasimplemented major projects that useour extensive solar resource.

ECMD provided funding to the All-Indian Pueblo Council to install an11 kW solar PV carport at the IndianPueblo Cultural Center in Albuquer-que. The array is now the largestcommercial PV array in the state andis expected to produce 25,000 kWhof electricity, save 43 tons of coal,conserve 1 million gallons of water,and reduce carbon dioxide emissionsby 27 tons per year. The system willsave the Cultural Center over $3,400per year. The carport will be visibleto 400,000 visitors annually. Severallarge areas in New Mexico, such as

Table 3. Average Solar Radiation in New Mexico


the Pajarito Mesa west of the City ofAlbuquerque, remain withoutelectricity but could be served withsolar PV technologies. Similarly,electricity is not available to 36.8%of households on the Navajo Reser-vation, 4.7% of the Jicarilla ApacheReservation, 2.7% of Zuni Pueblo,and 1.9% of Acoma Pueblo.

The use of solar energy in our NewMexico State Parks has improvedtheir safety and convenience. ECMDinstalled 29 solar PV lightingsystems at visitor centers, paystations and other locations in 15 ofour State Parks. Also, a solar PVaeration system was installed at theRio Grande Nature Center to createbetter conditions for aquatic life.

It should also be noted that oldersystems installed in the early 1980shave been kept operational. ECMD hasmade improvements to each 16,000square foot solar hot water system atthe Central and Southern New MexicoCorrectional Facilities. The NorthernNew Mexico Community College alsoreceived assistance to make improve-ments to their solar system.

WindWind is a proven, cost-effective, andenvironmentally attractive source ofpower. Recent technological innova-tions in wind turbine design haveresulted in increased effectivenessand reduced cost. The cost ofelectricity from wind power plantshas dropped to about $0.04 perkilowatt-hour (kWh), very close tothe cost of power from fossil-fuelsources. Public utilities across thecountry and around the world arebeginning to include wind in theirmix of energy sources. Large windpower plants have recently begunoperation in western Texas near theNew Mexico border. ECMD assistedSandia National Laboratory (SNL)and the U.S. Department of Energy(DOE) in their efforts to purchasewind power from SouthwesternPublic Service Company/Xcel forthe Waste Isolation Pilot Plant nearCarlsbad.

Although New Mexico has manyareas with an abundance of windenergy only one commercial windturbine has been installed in NewMexico. A 660 kW Vestas windturbine (see photo) was installed in1999 near Clovis by The TexasWind Power Company of Austin, 660 Kilowatt commercial wind turbine near Clovis. Source: ECMD


Texas. A second turbine willsoon be installed at the site.Its construction was triggeredprimarily by SNL’s subscrip-tion to purchase wind powerfrom Southwestern PublicService’s Windsourceprogram. Wind energyactivities in New Mexico inrecent years have beenlimited primarily to research.The New Mexico Energy,Minerals and Natural Re-sources Department(EMNRD) is continuing adetailed wind energy re-source assessment of themost promising sites forcommercial development.SNL is conducting ongoingresearch to develop economi-cal wind turbines for powergeneration.

The potential for electricitygeneration from wind isenormous in some areas ofNew Mexico, especially onthe eastern plains. NewMexico ranks twelfth in windelectric potential and isamong twelve states in themidsection of the countrythat, together, have 90% ofthe total commercial windelectric potential in thecontiguous United States. Theannual wind energy potential of NewMexico has been estimated to be 435billion kWh. New Mexico has thepotential to produce many times itsown electrical consumption, whichputs it in a position to export windelectric power.

EMNRD has initiated a project toperform a detailed wind resource

assessment of the state. Phase one ofthe project, which has been com-pleted, was a partnership with theNational Renewable Energy Labora-tory. The project was funded byEMNRD, the DOE, and the PublicService Company of New Mexico.These partners recognize that thedevelopment of this resource isimportant to the future economy ofthe state. Phase one identified sites

PNM Public Service Company of New MexicoAPS Arizona Public Service ComapnySPS Southwestern Public Service ComapnyEPE El Paso Electric CompanyTNP Texas-New Mexico Power CompanyLCE Lea County Electric Cooperative

WAPA Western Area Power Administration

UTPL Utah Power and Light CompanyTGE Tucson Gas and Electric CompanyDOE U.S. Department of Energy

WSCC Western Systems Coordinating CouncilSPP Southwest Power Pool

Figure 1. Potential Wind Power Sites and Existing Transmission Lines

(see Figure 1) with the highestpotential for commercial develop-ment taking into consideration all thefactors that affect the feasibility ofdevelopment. Computer analysis andfield surveys by an experiencedmeteorologist were used to obtainuseful, accurate results. The projecthas produced the first detailed windmap of New Mexico. Most of theselected sites with the highest


potential are in the eastern plainsbecause of the good wind resourceand availability of power lines forinterconnection. The most attractivesites are on mesas and ridges nearTucumcari.

Phase two of the wind resourceassessment is actual wind speedmonitoring. EMNRD has contractedto have two years of wind speed datacollected at six of the most promis-ing sites. Two years of data havenow been collected and all of thesites have good wind speed (milesper hour, at 40 meters height):Johnson Mesa (18.1), Frio Draw(16.6), Mesa Redonda (18.6), SanJuan Mesa (17.7), Tatum (15.4),Guadalupe Mtns. (16.7).

Such data are vital to commercialdevelopment of wind power plantsbecause they allow accurate esti-mates of power plant production.EMNRD has received requests from,and provided the data to many windpower developers. The six sitesselected for monitoring are widelydistributed in the eastern part of thestate, and include a variety of terrain:plains, mesas, ridges and mountains.The data will be representative of thewind resource at numerous sites withsimilar terrain. The data may also beused to improve the general accuracyof the State’s wind map.

In addition, EMNRD has purchaseda smaller, portable monitoring towerthat is used to sample wind speed ata height of 10 meters and is easier tomove to various locations. The firstlocation selected on MescaleroRidge in Eddy County proved to bevery windy. The instrument willremain for one year.

EMNRD contracted for analysis ofthe potential economic developmentbenefits of wind power. The workhas been completed and reportsproduced that predict the effects ofconstruction and operation of a 40MW wind power plant in each offive counties: Eddy, Otero, Quay,Lea, and Colfax. Effects studiedinclude jobs, earnings, sales andrevenue.

SNL conducts an ongoing windenergy research program thatemploys a multifaceted approach tothe development of economical windsystems for power generation. First,it conducts applied research inaerodynamics, structural dynamics,fatigue, materials, manufacturing,controls, and systems integration tounderstand unsolved technologyproblems and to provide betterdesign tools. A major new effort inapplied research is the investigationof rare atmospheric events thatsignificantly impact wind turbinelong-term structural integrity.Second, SNL applies its analyticaland experimental capabilities tosolve specific industry technicalproblems that are impeding thedeployment of reliable, cost-effec-tive solutions for domestic andinternational markets. Finally,advanced manufacturing techniquesare being used to reduce cost andincrease reliability of wind turbineblades. Follow-on efforts willconsider the complete product lifecycle, with emphases on fullyintegrated design, agility, and toolsto support a design-for-manufactur-ing process. In all three approaches,SNL uses formal and informalteaming arrangements to workclosely with wind turbine manufac-

turers, wind farm developers/operators and other DOE laborato-ries.

As part of SNL’s Blade Manufactur-ing Improvements project, the firmof TPI Composites produced aprototype blade that incorporatesseveral enhancements to their blademanufacturing process to lower costand improve quality and reliability.These improvements include the useof the SCRIMP resin infusiontechnique, the use of reusable siliconbags and heated molds, and theinclusion of an innovative labor-reducing root design. This prototypeblade development and the associ-ated improvements in manufacturingled TPI to get back into the bladeproduction business. They recentlysigned a contract with Mitsubishi tofabricate 110 blades (each 26.5meters long) for Mitsubishi’s 1 MWturbine. These blades will be part oftwo wind development projects - 14turbines in Wyoming and 20 turbinesin a field near Amarillo, Texas.

A unique measurement campaignbeing conducted by SNL is the long-term inflow and structural test(LIST) program. The objective ofLIST is to obtain long-term (at leastone wind season) continuous mea-surements of the inflow coupled tomeasurements of the structuralresponse of a wind turbine. Basedupon the demonstrated results of theLIST program, SNL is monitoringthe performance of one of Enron’s1.5 MW turbines located in theIndian Mesa wind farm near Ft.Stockton, Texas. The wind regime isthis area is similar to that encoun-tered in Eastern New Mexico.


Hydropower

Elephant Butte Dam and Power Plant, Sierra County. Source:U.S. Bureau of Reclamation

New Mexico’s hydropower resource base exists in theform of hydroelectric capacity from large dams andreservoirs. The capacity is currently 78.4 megawatts (MW)from 9 plants.

PRODUCTION

Hydroelectric plants in New Mexico produce 230 millionkilowatt-hours (kWh) per year. See Table 4 for a list offacilities.

Table 4. New Mexico Hydroelectric Production

BiomassOVERVIEW

Wood burning for heating is perhapsthe most traditional use of bioenergyin New Mexico, and this continuesto be the largest use. The othercommon use of bioenergy in NewMexico involves the production ofmethane from municipal wastewatersludge. This fuel is then burned toheat the digestion process, and insome cases to also generate electric-ity for operation of the plant.

Bioenergy is produced by combus-tion of either nonfossil biologicalfeedstock or other products madefrom such feedstock. The feedstockmay be either produced or harvestedexplicitly for such use, such as grainmilo and firewood, or may be awaste stream from agricultural,municipal or industrial sources.Distribution of and access to theresource are critical to the success ofbioenergy use. For this reason thecreation of bioenergy is often foundat the point of availability of a waste

stream, with a facility’s size deter-mined by that stream. Production offuel alcohol is covered in anothersection of this report.

RESOURCES ANDPRODUCTION

Annual estimated bioenergy re-sources are provided in Figure 2.Use of forest products as fuel isperhaps the oldest and most tradi-tional use of bioenergy in New


Mexico. The best available researchon New Mexico fuelwood indicatesthat 197,000 cords (see Figure 3)were harvested in 1986, which isneither a significant drain on thegrowing stock inventory nor acompetitor with the timber productsindustry. This is equivalent to about3.6 trillion British Thermal Units(Btu).

Albuquerque and Las Cruces areusing the anaerobic digestion ofmunicipal wastewater sludge togenerate methane gas. The gas thenfuels the production of electricityand heat to power the wastewaterfacilities. Los Alamos, Roswell andCarlsbad are using the resultingmethane to heat the digestingprocess and/or water. Severalsawmills burn waste wood to pro-vide heat for wood drying kilns.

The waste stream bioenergy resourcein New Mexico has been studied indetail. The total potential for energyproduction in this sector is large, at35 trillion Btu per year, although alarge share of this resource isallocated for other uses such asparticleboard manufacture. Thelargest sources in this sector aresawmill/ wood product waste andmunicipal solid waste.

RECENTDEVELOPMENTS

Several new bioenergy projects areunderway in New Mexico. The Cityof Albuquerque and New MexicoState University are carrying a long-term study of a municipal solidwaste bioreactor design into thefield-scale construction phase. The

cities of Las Cruces and OjinagaMexico are jointly studying aprocess for growing fuelwood withwastewater sludge.

The U.S. Forest Service is workingwith the State Forestry Division ontwo wood chip fueled power systemsat Jemez Mountain schools and theGlorieta Conference Center. Groupsin Silver City and Angel Fire arestudying use of lumber mill residuesand forest thinnings for fueling abioenergy project. New MexicoState University’s demonstration of a

Figure 3. New Mexico's 1986 Fuelwood Harvest

Figure 2. NM Annual Estimated Potential and Actual Bioenergy Resource

tumbleweed harvester could helpmake this high-energy material apractical energy source.

Rapid growth of the New Mexicodairy industry has greatly increasedthe production of manure in NewMexico. The State of New Mexico isworking with the U.S. Department ofEnergy to develop a project involvingthe use of a bioreactor to producemethane from this waste. Dona AnaCounty pecan growers are exploringthe feasibility of using pecan grovewaste to fuel generation of electricity.


GeothermalOVERVIEW

New Mexico has significant low-temperature (<194 degreesFahrenheit) geothermal resourcesalong its western border and in closeproximity to the Rio Grande fromnorth to south. Our state is alsoblessed with considerable moderate-to high-temperature resources,including those in the Rincon area ofDona Ana County, near Cotton Cityin Hidalgo County, and the VallesCaldera area in the Jemez Mountains(Sandoval County). See Table 5.

PRODUCTIONAND USE

Geothermal resources in NewMexico have been used directly in asignificant manner for over 20 years.In the 1980s, a large district heatingsystem was installed at New MexicoState University (NMSU) in LasCruces; and the largest geothermalgreenhouses in the nation wereconstructed. A key factor responsiblefor encouraging the development anduse of geothermal energy at that timewas a $600,000 appropriation fromthe New Mexico State Legislaturefor geothermal research, develop-ment and demonstration (RD&D)projects. EMNRD-ECMD, withsubstantial technical assistance fromthe Southwest Technology Develop-ment Institute (STDI) at NMSU,established and implemented thegeothermal RD&D projects. Subse-quently, STDI constructed ageothermal greenhouse research andbusiness incubator facility in Las

Table 5. New Mexico Geothermal Resources

Table 6. New Mexico Geothermal ApplicationsSources: Geothermal Energy Association [email protected]

Cruces, as well as a geothermalaquaculture facility co-located onsite. As a direct result of theseefforts, four commercial greenhousestotaling over 30 acres have beenestablished in southern New Mexico.STDI estimates that these fourgeothermally heated greenhousesrepresent a capital investment ofmore than $10 million, generating atleast $14 million in annual sales andabout 270 jobs. One of the largest

geothermal aquaculture facilities inthe Nation is also located in NewMexico, in the Animas Valley southof Lordsburg. This facility is ownedand operated by Americulture, Inc.Table 6 provides information on thevarious direct-use geothermalapplications in New Mexico. Todate, however, the state has notwitnessed construction of anycommercial-scale geothermalelectric generation plants.

Energy Efficiency and Renewable Energy Resources · 2014-06-27 · Energy efficiency and renewable...

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Transcript of Energy Efficiency and Renewable Energy Resources · 2014-06-27 · Energy efficiency and renewable...