Solar trade dispute impacts PNM power supplies - Albuquerque Journal

Solar trade dispute impacts PNM power supplies

A new 50-megawatt solar array at the Jicarilla Apache Nation was inaugurated earlier this month. (Courtesy of PNM)

Copyright © 2022 Albuquerque Journal

The trade dispute that’s disrupting solar development in New Mexico and across the country is now threatening Public Service Company of New Mexico’s projected power supply for summer 2023, once again raising the specter of potential blackouts next year.

That’s because the U.S. Commerce Department investigation into tariff evasion, or circumvention, by solar panel manufacturers in some Southeast Asian countries is interrupting needed supplies for two of four new solar facilities that are supposed to replace the coal-fired San Juan Generating Station after it fully closes in September, said PNM Vice President for Generation Tom Fallgren.

Those delays mean that nearly half of the 950 megawatts of solar generation and battery storage that was scheduled to be fully online by early next year now won’t be available until after summer 2023.

In addition, about 740 MW of additional solar generation expected to replace the loss of electricity from the Palo Verde Nuclear Generating Station in Arizona after two PNM plant leases there expire next year will likely also be delayed until 2024, at the earliest, Fallgren said.

“We have some significant challenges to deal with before next summer,” Fallgren told the Journal. “The solar project developers weren’t able to lock in needed supply contracts, and now they have to figure out alternatives. It’s got everything backed up.”

PNM said early this year that it was facing potential rolling blackouts this summer, and in summer 2023, largely because of pandemic-induced supply-chain constraints that set back the timelines for both the San Juan and Palo Verde solar replacement projects.

It resolved this summer’s projected power shortfalls by extending operations at one of San Juan’s two generating units, with only one of them now scheduled to close by the original June 30 shutdown date, and closure of the other one postponed until Sept. 30, after summer peak electricity demand is over.

The four solar replacement facilities were then expected to come online on staggered schedules starting in the fall and concluding in early 2023.

But now, only two will be operational before summer 2023 – a 450 MW “Arroyo” solar and battery system in McKinley County, and a 70 MW “Jicarilla” solar and battery facility in Rio Arriba County.

Construction and startup dates for the other two projects – a 130 MW “Rockmonth” solar and battery facility and a 300 MW “San Juan” solar and battery project – remain open questions, Fallgren said.

That significantly magnifies the potential problems PNM was already facing from delays in bringing online the solar replacement facilities for Palo Verde. And, thanks to the trade dispute, the construction and startup dates for those solar projects as well remain an open question, Fallgren said.

“With the latest supply-chain disruptions from the tariff issue, we no longer have confidence that any of those projects (to replace Palo Verde) will be delivered in 2023,” Fallgren said.

The four Democratic members of New Mexico’s congressional delegation pointed specifically to the problems faced by PNM in a joint letter sent Monday to President Joe Biden urging a rapid conclusion to the Commerce Department investigation.

“The uncertainty this investigation has created will likely place the San Juan replacement power project in jeopardy once again,” the delegation said. “Additional delays to the four replacement solar projects caused by the uncertainty created by this case will further exacerbate the existing resource inadequacy challenges facing New Mexico.”

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