Xcel Energy could double power capacity in New Mexico by 2030 amid growth in oil and gas
A top utility provider in eastern New Mexico said it planned to potentially double its power grid in response to growth in the region, both in population and industrial demands.
Xcel Energy said it will need to add five to 10 gigawatts of power to the region by 2030 to the current installed capacity of about 7,500 megawatts. A gigawatt is 1,000 megawatts.
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Peak demand for Xcel’s system in eastern New Mexico and West Texas was about 6,000 megawatts, the company reported, but that was expected to spike in the coming years.
This was led by population growth in the area, the report read, as Eddy and Lea counties in southeast New Mexico saw the highest population increases in the state at 15.8 and 15 percent, respectively.
That growth was largely driven by a booming oil and gas industry in the Permian Basin, which spans southeast New Mexico and West Texas, and was also listed by Xcel as a driver of heightened power demand.
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Efforts by the industry to electrify facilities, intended to curb air pollution emissions, led to higher demand, the report read, along with the expected adoption of more electric vehicles.
Meanwhile, older power plants in the region are being retired and rebuilt, Xcel reported, while the company works to integrate more renewable energy into its power supply.
Those factors led to Xcel filing an Integrated Resource Management Plan (IRP) with the New Mexico Public Regulation Commission last week, detailing how it planned to improve capacity for its customers in the state.
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“We have spent months working with our stakeholders and communities to assess future needs and to understand how our customers expect us to meet those obligations,” said Adrian Rodriguez, president of Xcel’s operations in New Mexico and Texas.
The plan’s emphasis on renewables was in response to the Energy Transition Act, passed by state lawmakers in 2019 and signed by Gov. Michelle Lujan Grisham.
The law required New Mexico to provide 100 percent carbon-free energy by 2045.
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In New Mexico and Texas, Xcel said 39 percent of its electricity comes from “carbon-free” sources like wind and solar.
“The resulting plan recognizes the importance of keeping power affordable and reliable across our service territory while meeting the goals of the New Mexico Energy Transition Act and our own carbon reduction targets,” Rodriguez said.
Xcel said its wind farms save customers about $3 billion in power costs resulting from renewable energy tax credits since 2017.
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Recent renewable energy installations cut carbon emissions by 52 percent last year from 2005 levels, read the report, and Xcel said it planned to seek federal dollars for additional renewable projects through the Inflation Reduction Act, along with projects to improve existing facilities.
“We anticipate adopting new technologies that are commercially available and furthest along in development, where the engineering, cost and supportive public policy make them a good solution and fit for our customers,” Rodriguez said.
“To reduce carbon emissions, we plan to pair our existing system with advanced technologies as they become available while continuing to meet customer expectations for reliable, affordable energy.”
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These efforts included previous proposals by Xcel to replace capacity from retired sites with solar power and associated batteries at the Cunningham Generating Station near Hobbs, and another solar plant at Plant X Generating Station in Earth, Texas.
Xcel said these projects would save customers up to $440 million in power costs.
In total, the company planned to meet a target of being fully carbon-free energy by 2050.
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After submitting the IRP, Xcel said it would file a request for proposal next year, seeking contractors to aid in its efforts to boost power capacity throughout the region.
Bids will be evaluated in 2024, with agreements to purchase power filed in 2025, and approval from regulators expected in 2026.
Construction was slated for 2027, with the new resources going online between 2028 and 2030.
“Our plan will power the economic engine in the Southwest by supporting the load growth that in turn supports the local economy and creates healthy, thriving communities,” said Brad Baldridge, Xcel Energy director of customer and community relations.
“Clean energy, dependable service and the health of our local economy matters to us, our customers and our communities.”
Adrian Hedden can be reached at 575-628-5516, achedden@currentargus.com or @AdrianHedden on X, formerly known as Twitter.
This article originally appeared on Carlsbad Current-Argus: Xcel Energy could double power capacity in New Mexico by 2030
