Tesla’s Megapack energy storage tech will be used to help New Mexico’s Public Service Company (PNM) to replace a retiring 562 MW coal plant, the San Juan Generating Station. The coal plant is located near the San Juan Mine and produced power at $45/MWh in 2018 and 2019.
Energy Storage News reported that PNM plans to procure energy from 950 MW of solar and storage facilities by next year while retiring the coal plant. PNM will lean on the Arroyo Solar and Storage Project, which is a 300 MWac solar PV plant with 150 MWac/600 MW of co-located battery storage. It has signed two separate offtake contracts for its solar and storage output and is planning to reach 100% emissions-free electricity by 2040.
DE Shaw Renewable Investments (DSRI), which develops, owns, and operates long-term renewable energy projects, said that it acquired the project from the original developer, Centaurus Renewable Energy. Centaurus initially brokered the long-term deals with PNM and closed a $70 million construction bridge loan facility before DSRI bought it.
DSRI is focusing on the solar PV and wind energy sectors and Arroyo is looking to optimize its first co-located solar-plus-storage project, which will be built using Tesla Megapack battery storage units. The Megapack will be assembled and integrated by Affordable Solar Installation, a local firm.
The article noted that the solar farm will use NEXTracker solar PV tracking technology and Sund Construction will build it. Electrical Consultands Inc will design the substation and switchyard and EPC Services company will build the infrastructure. SOLV, which is a subsidiary of both Tesla and Swinerton Renewable Energy, will perform operations and maintenance.
NM generation vice president Tom Fallgren said, “As PNM continues our path to 100% carbon-free electricity, we eagerly await the first of the large-scale batteries and associated solar to come on our system. This project demonstrates New Mexico’s leadership throughout the nation in reducing our carbon footprint.”
DESRI CEO David Zwillinger said, “Incorporating battery storage in solar projects has the potential to change the landscape of the renewable energy industry going forward, and we’re excited to offer storage capabilities to PNM as part of the Arroyo project.”
The Fight To Keep The Coal Plant From Retiring
In October of 2020, KRQE reported that a proposal would keep the San Juan Generating Station open with new technology. The hope was that it would continue to operate for another decade. KRQE said, “A new $1.4 billion overhaul would help it meet stricter environmental requirements. The plant would be retrofitted with carbon capture technology which the Department of Energy said would help protect jobs as well as tax revenue.”
In July 2021, the Santa Fe New Mexican shared a bit more details on this plan and its challenges, noting skepticism among New Mexico lawmakers. The article noted that this was a $1.5 billion project and that it was behind schedule and didn’t have all of its financing in place. Republicans were all for it while Democrats were skeptical. Mayor Nate Duckett of Farmington told members of the legislature’s Water and Natural Resources Committee that his city wasn’t ready to give up on the plant:
“Just like everybody else would like us to do.
“Yeah, we would like to see some of those milestones hit and the dates that were set originally, but this is a big, hairy, audacious goal.
“You’re trying to take a currently operating coal plant and [retrofit] it, transitioning ownership, adding new infrastructure in there, putting in new technologies that have been tried and utilized successfully in other places but now working with a scale that’s never been seen before.
“This is huge but it takes people with vision, takes people with audacity and tenacity and all those things to go out there and actually try and get these things done.”
Democratic leaders were worried about the unknowns and Enchant Energy, which is the city’s partner, wants to transfer the long-term liability to the state government. Enchant Energy’s website said that the project would further the state’s goal of substantially reducing its carbon dioxide emissions while supporting the state’s economy:
“By employing hundreds of people in San Juan County and on the Navajo Nation by providing reliable, low-cost wholesale electricity.
“It’s a rare opportunity to support such an environmentally friendly policy while simultaneously preserving hundreds of well-paid jobs that are simply not otherwise available to the residents of San Juan County and the Navajo Nation. A true win-win.”
The report from Energy Storage News seems to suggest that the plant will be retired and replaced with renewable energy. So far, there’s not been a major announcement that I could find on the proposal to keep the plant operational.
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