An example of what the wind farm will be in Eastern New Mexico will look like. Courtesy photo
The solar panels located on the former landfill site in Los Alamos. The solar field being constructed by Uniper is in Central New Mexico. Courtesy/DPU
By KIRSTEN LASKEY
Los Alamos Daily Post
The Department of Public Utilities (DPU) has been negotiating a contract for renewable power that appears to be an all-around win.
A Power Purchase Agreement (PPA) with Uniper Global Commodities for 15 megawatts of energy from wind and solar projects in New Mexico was unanimously passed Wednesday night during the Board of Public Utilities (BPU) meeting.
The PPA offers numerous perks. First, the energy received would be firm; meaning that during periods of time when the sun isn’t shining or the wind isn’t blowing, Los Alamos County would still receive the energy. Uniper would purchase power from the market, which is assumed to be from nonrenewable sources, to account for the intermittent nature of renewables.
“The bottom line is that the County would get 15 megawatts around the clock for a total of 131,400 megawatt hours annually. Based on the wind and solar generation profiles, approximately 80 percent would be renewable and 20 percent from market purchases,” DPU Deputy Utilities Manager Steve Cummins said.
From an operational perspective, Uniper assuming this responsibility saves DPU time and resources, he added.
The advantage of a combined wind and solar contract is that they tend to complement each other, Cummins said, meaning when there is no sunshine there is often wind and when there is no wind there is often sunshine.
Another plus is the price. The rate per megawatt hour would be $36.67, which would not change during the 15-year term of the PPA.
Cummins said this would allow the DPU to save money; it is estimated during the 15-year term, there would be more than $11 million in savings when compared against today’s best forecast on market power prices.
He explained that the PPA would replace a significant amount of power that is currently being purchased from the market.
According to the BPU agenda documents, the $36.67 per megawatt hour rate also is less than the County’s blended cost of power in FY2019, which was $48.66 per megawatt hour. It also was reported in the agenda documents that the average price for market power purchases in FY2019, was $40.89 per megawatt hour.
Cummins noted that while the DPU can expect a savings, staff does not anticipate that customer electric rates will be reduced. He said the power the County will receive from this project will only account for approximately 20 percent of the total demand. The County has contracts with other energy generating facilities such as the San Juan Power Plant and the Laramie River Station.
Plus, DPU still needs to address its aging infrastructure. Cummins points out that what the PPA does is help DPU maintain competitive rates as it moves toward its carbon neutral goal and future replacement resources.
The wind and solar fields will be in the state. Cummins said the solar field is expected to be constructed in Central New Mexico and the wind farm in Eastern New Mexico.
Once the projects are finalized, and approved by the County, the generator name, identification number, location and type of resource will be included in the contract as an exhibit.
Cummins said the County could start receiving energy from the solar and wind projects no later than the fall of 2021.
Partnering with Uniper Global Commodities, which has 36 gigawatts of generation capacity worldwide, provides opportunities like this, Cummins said.
Since Los Alamos County energy demands are relatively small compared to the large investor-owned utilities, it is difficult to get into these types of projects, Cummins said.
Wind and solar developers are not interested in building smaller projects because they need to spread the cost of interconnecting to the transmission grid over more units of energy to get the economies of scale.
“We’re trying to have just enough to meet our load,” he said.
Uniper, on the other hand, is a global company with 11,000 employees in 40 countries. It is headquartered in Germany and has two offices in the U.S.
Cummins said DPU staff learned about this project through its networking with different organizations such as the Utah Associated Municipal Power Systems (UAMPS), the Western System Power Pool (WSPP) and others.
Because the power industry is changing so quickly as it moves away from carbon-based fuels, Cummins emphasized the need for industry partners to work together.
“We’re always working with our industry partners,” he said.
Adding that opportunities like this PPA with Uniper, “really comes down to partnerships and timing.”