Energy bill too good to be true?
When something sounds too good to be true, it usually is. That’s the reality of our state’s recently enacted “green energy” bill. I’m an engineer with more than 50 years of experience in power system planning and reliability. When I read the provisions of the Energy Transition Act, I knew something was fishy. One hundred percent renewable energy? We get a cleaner environment, Public Service Company of New Mexico gets compensated for its coal-fired generator costs, and customers’ electric bills actually decline? Everybody gains and there’s no downside? This did not compute, as they say. So I started digging.
I didn’t have to dig very far. I discovered that all this is being enabled by a radical reduction in power system reliability. In fact, even now, PNM is using a reliability standard for generating resources that is significantly lower than what’s generally accepted in North America and most of the developed world. Four times lower, to be exact. This only will get worse as renewable penetration increases. And the documentation is in a report published by PNM itself.
Every three years, PNM publishes an Integrated Resource Plan, most recently on July 3, 2017. That report explicitly states, “PNM targets a minimum 13 percent planning reserve margin.” Significantly, the 13 percent is not a result of the one-day-in-10-year Loss of Load Probability criterion that is almost universally used by the power industry. Rather, it’s the result of a “stipulation approved in NMPRC Case No. 08-00305-UT.” Sounds like politics, not science. The report goes on to state, “Achieving a one-in-10-year probability would require a reserve margin target in excess of 20 percent.” According to the Integrated Resource Plan, the equivalent Loss of Load Probability for PNM’s 13 percent reserve margin is four days in 10 years.
Later on, the PNM report demonstrates that, with 50 percent renewables, the 13 percent reserve margin would translate into eight to 10 failure events per year; 80 percent renewables would result in 57 failure events per year. That’s 57 blackouts or brownouts every year — an average or more than once a week! The report states that “reliability would significantly degrade before 40 percent renewable penetration is reached and costs are significantly higher once 50 percent penetration is reached.” In a PNM report, that’s an astonishing admission.
In summary, New Mexico’s current “energy transition” policy will lead to a devastating increase in the probability of blackouts and brownouts, and/or much higher costs to maintain a reliable reserve margin. Most likely both. Lower reliability and higher costs will inevitably become a major disincentive for attracting the nonextraction businesses New Mexico so desperately desires — and needs.
So what’s the endgame? Well, if the 13 percent reserve margin target is maintained, and conventional generating resources are removed and replaced by renewables, we’ll begin to experience power shortages — and the inevitable blackouts and brownouts. The blame game will shift into high gear, and the public and press will demand a fix. Reserve targets will be raised and additional capacity added — gas-fueled generators, nuclear plants, pumped storage hydro, massive installations of rechargeable batteries or other forms of energy storage, customer load curtailment — or “all of the above.”
Each of these will come with its own costs for construction, operation, maintenance, etc. Either electric rates will escalate or the state government will begin subsidizing electric power resources. In any case, the cost will ultimately be paid by the public — through electric bills or through taxes. Choose your poison.
I have nothing against renewable resources — in fact, I consider them a great asset. But we cannot ignore the laws of science — and an increase in renewables should not be enabled by a catastrophic reduction in reliability. None of the discussions in the Roundhouse focused on science. It’s time we start doing just that.
George C. Loehr has a bachelor’s in electrical engineering from Manhattan College and a master’s in English literature from New York University. He lives in Albuquerque.