Renewable-energy production in New Mexico is experiencing a “boom,” according to the New Mexico State Land Office, which recently announced the awarding of a bid for state land to a wind developer.
More than 16,000 acres of state trust land located in Grant County were awarded via the bidding process to Great Divide Wind Farm LLC, a subsidiary of Boulder, Colorado-based Scout Clean Energy.
The original project parameters have changed based on an interconnection issue, according to Scout Clean Energy President Michael Rucker. It now consists of two 80-MW projects designed to generate 160 MW. Great Divide was, according to the state, the only applicant for the land and has acquired or plans to acquire more than 30,000 additional acres from nearby landowners.
“The announcement of the Great Divide Wind Farm is just a fraction of our strategy to jump-start New Mexico’s renewable-energy future. It is just six months into my administration, but we are on track to hit our goal by tripling the wind and solar generation on state trust land,” New Mexico Commissioner of Public Lands Stephanie Garcia Richard said. Within the lease term, the project is expected to generate $16 million for New Mexico public schools, hospitals and colleges. Most of the revenues should benefit public schools.
Public-land lease terms are typically 25 years, according to Rucker.
“With the number of applications pending for projects on state trust land, New Mexico will soon see a booming wind and solar economy, which means new revenue flowing to the Land Office,” Garcia Richard said. “It is our mission to diversify our revenue while also helping to move New Mexico toward a clean energy future.”
Construction is expected to last 18 to 24 months.
Great Divide is still in court with the New Mexico Public Regulation Commission seeking enforcement of the commission’s Public Utility Regulatory Policies Act of 1978 obligations. Its initial case was dismissed, but then taken to the Federal Energy Regulatory Commission, which issued a notice of intent not to act and declaratory order Feb. 4.
The case is now in New Mexico district court, Rucker said. Resolution is needed so Great Divide can begin courting offtakers for the project’s generation. It expects to focus on the New Mexico and Texas power markets.
Garcia Richard’s boom assessment would seem to be correct, since revenues paid to the State Land Office are conservatively estimated to exceed $1 billion in fiscal year 2019, according to a July 10 news release from the agency. This is expected to be a record.
“Even with the most conservative projections for the last three months of the fiscal year, 2019 revenue is projected to be approximately $1.1 billion,” the land office said. In the previous fiscal year, that figure was $852 million. This is an increase of roughly 29 percent.
Large increases from renewable-energy leases are credited with contributing to the FY 2019 revenues. Compared with 2018, there has been a 1,300-percent revenue increase in solar energy lease payments and a more than 400-percent revenue increase in wind energy lease payments, according to the state.
Some of these fees will be used to fund State Land Office operations, which were $17.4 million or 1.56 percent of the office’s projected total revenue.