The first of three solar projects a French company plans to build in New Mexico is expected to be operational by mid-2022, the CEO of its U.S. subsidiary told members of the San Juan County Commission at a Nov. 10 meeting. The county, which is located at the northwest corner of the state and borders Colorado, Arizona and Utah, is home to two large coal-fired power plants scheduled for retirement in coming years.
Photosol U.S. plans to develop solar-plus-storage resources on private land near Public Service Company of New Mexico's 847-MW San Juan Generating Station, scheduled for closure in 2022, and on reclaimed land adjacent to the nearby 1,540-MW Four Corners Power Plant, operated by Arizona Public Service and scheduled to close in 2031.
Building solar at these sites will help New Mexico meet the requirements of its 2019 Energy Transition Act and restore some of the tax base to the community that will be affected by the retirements. It will also allow Photosol to use existing transmission resources and reduce permitting by siting some of the projects on already disturbed land.
At least 400 MW of the 598-MW San Juan Solar Project is expected to go on line in June 2022, when PNM closes the San Juan Generating Station. The utility has a power-purchase agreement with Photosol U.S. under consideration by the New Mexico Public Regulation Commission, which Josh Case, CEO of the Lehi, Utah-based subsidiary, says he expects to be approved by the end of the year.
The power plants, built in the 1960s and 1970s, currently have 2,464 MW of combined capacity and serve customers in Utah, New Mexico and Arizona. From 1982 to 2014 the plants operated at full capacity. San Juan's four units and Four Corners' five units had a combined capacity of 3.9 GW and served end users as far away as California and Texas. Both plants closed units in the mid-2010s and retrofitted remaining ones to meet emissions standards as required by the Clean Air Act.
The San Juan Solar Project does not require a conditional-use permit and has cleared most of its procedural hurdles, Case said. A gen-tie line on U.S. Bureau of Land Management property will connect the solar array and up to 300 MW of storage via the power plant's existing 345-kV switchyard. The final right-of-way permit for the line's National Environmental Policy Act application is expected to be approved in the first quarter of 2021, Case said. A meteorological station was installed in January.
San Juan Solar is split between two interconnection requests, Case said at the meeting. PNM has an interconnection agreement with Photosol for 400 MW of the 598-MW project, although the developer anticipates that only 200 to 299 MW will be operational by June 2022. Interconnection studies continue on the remaining 198 MW, and Case said he expects the first of those to conclude in early 2021. The NMPRC is expected to decide parameters of the PPA between PNM and Photosol before the end of the year. It will be for at least 200 MW of solar and 100 MW of storage, Case said.
Photosol has partnered with the Navajo Transitional Energy Company to develop 400 MW of solar and up to 400 MW of storage at the Shááńdín Solar Project. Shááńdín, which means "sunshine" in Navajo, will be sited on up to 3,500 acres of reclaimed land at NTEC's Navajo Mine, which serves the Four Corners plant. The San Juan Chapter of the Navajo Nation in September 2019 passed a resolution supporting a 345-kV transmission line that would run from the project site for interconnection at the Four Corners plant, and the final interconnection study is complete. Both the mine and the plant are located on the Navajo Nation, and NTEC is wholly owned by the Navajo Tribe. Case anticipates the entities will sign an interconnection agreement by the end of the year.
PNM in early November arranged with NTEC to be released in 2024 from its current coal obligations at the Navajo Mine. The move frees the utility to exit the Four Corners plant, and thus coal generation, seven years earlier than it had planned. In exchange for release from the contract, PNM will pay NTEC $75 million upfront and transfer its 13-percent, 200-MW stake in Four Corners when it leaves the plant. NTEC currently has a 7-percent stake in Four Corners. PNM plans to issue a request for proposals for replacement of its Four Corners resources in the first quarter of 2021, spokesman Ray Sandoval recently told California Energy Markets in an email (see CEM No. 1615).
The third project, the 360-MW Shiprock Solar, will be sited on 2,000 acres of BLM land and 500 acres of private land under contract, Case said. It will also feature up to 360 MW of storage. Of the three sites, it is the only one that required a variance from BLM, as it is outside the agency's defined solar energy zones (see CEM No. 1592). BLM approved the project's variance in August, and its NEPA process is underway with the Farmington BLM Field Office, Case said. Photosol hopes to interconnect the project to the Western Area Power Administration via its Shiprock Substation and has an Interconnection request with WAPA for 360 MW in the final phase of study. Case hopes to get through the NEPA process for Shiprock within the next year, and anticipates both the Shiprock and Four Corners projects will be operational by late 2023 or 2024.
During his presentation at the meeting, Case said all three sites are ideal for solar development in terms of topography and solar potential. Case in an email said Photosol is working with several battery manufacturers and will select one in the next 45 to 60 days. The company is actively marketing the projects to all potential offtakers in the region, he said, and hopes to have PPAs in place by the time the projects go on line.
Photosol was able to take advantage of the full 30 percent in federal tax credits for solar projects through 2023 by purchasing transformers in 2019. The tax credits stepped down to 26 percent this year and will step down to 22 percent in 2021.
This article has been updated to correct siting information for the San Juan Solar Project and to clarify details about PNM's interconnection agreement with the project.