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El Paso Electric selects mix of solar, storage and gas to meet future demand

El Paso Electric Co. plans to use a mix of utility-scale solar, battery storage and natural gas to meet future generation needs.

The Texas-based utility on Dec. 26 announced the results of its 2017 all-source request for additional capacity to meet 2022 and 2023 summer peak season generation demand. Through initial resource planning studies, El Paso Electric identified about 50 MW of additional capacity needed by 2022 and 320 MW of additional capacity needed by 2023.

El Paso Electric said the winnings bids, which exceeded the 370 MW of needed capacity, include a potential power contract for 200 MW of utility-scale solar generation, 100 MW of battery storage and the construction of a 226-MW natural gas unit at its Newman power plant. The company said it expects the new gas unit to cost about $143 million and begin operations in 2023.

El Paso Electric said it also plans to purchase 50 MW to 150 MW of wind and solar generation "to provide for fuel diversity and energy cost savings."

"This balanced combination of resources will work with our existing energy portfolio as we move to retire aging, less efficient plants while continuing to meet our customers' changing energy needs," El Paso Electric President and CEO Mary Kipp said in a Dec. 26 news release.

The selected bids and contracts are subject to negotiations and certain approvals by the Public Utility Commission of Texas and the New Mexico Public Regulation Commission.

El Paso currently has 8 MW of operating solar nameplate capacity and 1,893.2 MW of operating natural gas nameplate capacity, according to S&P Global Market Intelligence data.

The company said it will provide an updated five-year capital expenditures forecast in response to the request for proposals on its fourth-quarter 2018 earnings call.