Heinrich: “New Mexico has the expertise and ability to be a world leader in advanced energy solutions”
ALBUQUERQUE – U.S. Senator Martin Heinrich (D-N.M.) delivered a speech in Albuquerque to state lawmakers, renewable energy leaders, researchers, and advocates during a conference, “Building an Advanced Energy Ecosystem in New Mexico,” laying out his vision to position New Mexico at the center of the nation's clean energy future.
“New Mexico has the expertise and ability to be a world leader in advanced energy solutions. Now, we need to deliver,” said Heinrich. “Our energy policy and investment decisions will be, at a minimum, deeply impactful. At a maximum, they could define New Mexico’s economy for generations to come.”
Heinrich pointed to his work to accelerate the clean energy transition through legislation and federal investments he has secured.
“During my decade and a half in Congress, I have secured major federal investments in clean energy innovation and deployment – to drive down the costs,” continued Heinrich. “The Infrastructure Law and Inflation Reduction Act are accelerants for these trends. In these two laws, Congress has delivered substantial, additional investments and incentives for clean energy manufacturing and deployment. We are already seeing clear proof of this right here in New Mexico.”
Heinrich also stressed the importance of staffing up state government agencies to enable federal investments to reach New Mexicans.
Heinrich concluded,” There is no time to waste if we want to get out in front of the energy transition before it passes us by. That requires urgently expanding our state government’s staffing levels. Without staffing up our state agencies, we can come up with good ideas and deliver investments, but they won’t reach New Mexicans.
“Done right, we will continue to create projects that export clean electrons, while importing capital and creating careers in the skilled trades that New Mexicans can build their families around. We will establish new industries. We will reshape our state’s entire economy. We will deliver for New Mexicans.”
Senator Heinrich’s full remarks as prepared for delivery are below. Senator Heinrich’s presentation slides can be found here.
Good morning.
Thank you, everyone, for being a part of this summit.
And thank you to Representative Meredith Dixon for her vision and hard work to pull all of this together.
I am excited to be here with you today, but I also want to acknowledge the grief that many of us are still feeling.
Yesterday, we laid Governor Bill Richardson to rest.
I had the chance to work for Governor Richardson as the State Natural Resources Trustee.
Governor Richardson believed New Mexico could do big things.
He never accepted mediocrity for our state - always pushing us to fight for the future our kids deserve.
Your presence here at this summit suggests to me that you want to do the same: to THINK BIG.
The caliber of the presenters, panelists, and participants at this summit make it clear:
New Mexico has the expertise and ability to be a world leader in advanced energy solutions.
Now, we need to deliver.
We are at a singular moment.
Our energy policy and investment decisions will be, at a minimum, deeply impactful.
At a maximum, they could define New Mexico’s economy for generations to come.
Why is this moment unique?
It’s several reinforcing factors.
The common thread is that these dynamics all reinforce each other.
And they are not linear.
As you can see here, when I was five years old, the cost per watt of generating capacity from utility scale solar was $100.
Today, it is well under 50 cents and continuing at a consistent, predictable decline.
The cost has declined more than 99%.
And the decline is based on the learning curves inherent in the manufacture and installation of this distributed technology.
As it has scaled, wind power has seen a similar cost decline.
The battery storage market is seeing a comparable pattern, with some deviations based on supply challenges.
These trends are expected to continue.
The result is that the vast majority of new generation projects on our grid will utilize solar, wind, and energy storage.
New Mexico is in an ideal posture to benefit from this shift.
Many of us have been working for decades to strategically position our state for this moment.
That includes passing policies nearly two decades ago under Governor Richardson’s leadership.
Policies like the Renewable Portfolio Standard and the establishment of the New Mexico Renewable Energy Transmission Authority.
During my decade and a half in Congress, I have secured major federal investments in clean energy innovation and deployment – to drive down the costs.
I will always be proud that one of the first votes I ever took was to pass the original wind and solar tax credits in 2009.
Back then, people questioned whether clean energy would ever be able to compete with fossil energy on the open market.
Spoiler alert: They are, and they are winning.
The 2009 tax credits led to a sea change in private capital investment and market adoption.
The cost of wind and solar projects has dropped faster than even the most optimistic predictions from a decade ago.
The unsubsidized levelized cost of solar photovoltaics dropped from around $300 to $400 per megawatt hour in 2009 to around $30 to $40 per megawatt hour in 2021.
That’s a ten-fold decrease in just 12 years since the 2009 tax credits were enacted.
The unsubsidized levelized cost of onshore wind energy dropped from around $100 to $170 per megawatt hour in 2009 to around $26 to $50 per megawatt hour in 2021.
Here’s where adoption curves come in – to make this particular moment so full of opportunity.
In the world of tech adoption, there’s a concept called an S-curve.
Essentially, research and development of a new technology moves along at a linear, incremental pace.
Then, ostensibly out of nowhere, there’s exponential, non-linear adoption.
Over our history, we saw this in the seemingly overnight switch from horse-and-buggies to motor vehicles.
You can see how dramatic that change was in these two postcards from Downtown Albuquerque that are only a few years apart.
In what must have felt like a blink of the eye all of the horse drawn carriages on our roads were replaced with automobiles.
More recently, we saw it in the rapid adoption of cell phones and then smart phones.
If you want to feel really old, try describing a pay phone – or even a landline – to a teenager.
The mobile devices that have become ubiquitous today were barely on our radar a couple decades ago.
But then prices came down and consumer demand rose exponentially.
And now none of us can go without them.
The catalysts for a shift from incremental to exponential, widespread adoption of new technologies are typically cost, convenience, and cultural values.
In the energy sector, we are in the midst of a shift to exponential, widespread adoption of clean energy and electrification.
This is a projection for the adoption curve for electric vehicles.
We are at the bottom of the “hockey stick” portion.
As we shoot up, shifting into non-linear growth in adoption of EVs, we will see two things:
- A dramatic increase in demand for electricity, and…
- Sagging demand for oil, roughly half of which is used for transport.
The Infrastructure Law and Inflation Reduction Act are accelerants for these trends.
In these two laws, Congress has delivered substantial, additional investments and incentives for clean energy manufacturing and deployment.
The Inflation Reduction Act, in particular, sets a decade-long suite of policy incentives for clean energy technologies, not the year-by-year incentives of the past.
In the world of tax policy, certainty matters.
1 + 1 + 1 does not always equal 3.
A decade of predictable tax policy is already creating larger-scale private investment than we were ever able to spur with more piecemeal one- or two-year tax credit extensions.
What we did on production tax credits in the Inflation Reduction Act is also setting industrial policy for the first time in 50 years.
By incentivizing the manufacture of clean technologies on a per-unit basis, we have created a manufacturing renaissance in the United States.
On this graph, you can see that since we passed the Inflation Reduction Act—and the CHIPS and Science Act—construction spending on new manufacturing facilities has literally gone off the chart.
The Investment Tax Credits in the Inflation Reduction Act have resulted in roughly 100 new factories announced in just the first 12 months since the Inflation Reduction Act.
Those factories represent 80 to 100 billion dollars of domestic private manufacturing investment.
We are already seeing clear proof of this right here in New Mexico.
Last month, President Biden visited the new Arcosa Wind Towers manufacturing facility in Belén, which is creating 250 advanced manufacturing jobs in Valencia County.
New Mexico has unbeatable blue skies and the best green chile, but that’s not why Arcosa chose us as the place to make their wind towers.
The local market for wind towers expanded exponentially two weeks ago, when we broke ground on the SunZia Southwest Transmission Project.
When it is completed, the combined SunZia Transmission and Wind Project will become the largest clean energy infrastructure project ever built in the entire Western Hemisphere.
New Mexico has incredible clean energy opportunities, but that alone didn’t carry SunZia to its groundbreaking.
I fought for SunZia for nearly 14 years, through a whole host of obstacles.
And it was worth every one of those fights.
Now, the global solar cell and panel manufacturer Maxeon has announced that it will open its very first U.S. manufacturing facility at Mesa Del Sol.
What would motivate a company that currently manufactures its products in Malaysia, the Philippines, and Mexico to invest $1 billion dollars to build a factory in New Mexico?
The revamped investment, manufacturing, and production tax credits we wrote in to the Inflation Reduction Act for starters.
We have made it so that projects get stackable benefits when they pay prevailing wage labor, locate in Energy Communities, and use American-made parts.
These stackable benefits are rapidly accelerating the shift to clean energy.
By rolling up our sleeves and negotiating game-changing legislation at the federal level, we have come a very long way.
I know many in our state legislature are equally committed to this work.
And you have had important successes.
Just recently, the Legislature – led by several of you here – appropriated 50 million dollars to jumpstart the state’s support for advanced energy and a just transition for frontline communities.
But there is absolutely still more we need to do.
The first place we need to invest is in our workforce.
President Biden said something in Belen that’s worth repeating here.
He said: when you think climate, you should think jobs.
According to the Blue Green Alliance, the Inflation Reduction Act will create 9 million jobs over the next decade.
Climate action and clean energy deployment will be the greatest wealth building opportunity of our lifetime.
The skilled trades work associated with these opportunities will fuel high-quality careers that New Mexicans can build their families around, in their home communities.
These careers will look and feel a lot like my dad’s career as an IBEW lineman.
His work keeping the power on in our community was literally my family’s ticket to the middle class.
We need to invest strategically in workforce training pathways to provide more New Mexico families with the same opportunity.
That means working collaboratively with our state’s labor unions, community colleges, and private industry.
We need to invest in expanding career technical education and work-based opportunities in these emerging fields as early as high school.
For example, the automotive mechanic programs in every high school and community college should be training EV technicians—not just combustion engine mechanics.
We also should double down on technical education programs like CNM’s Electrical Trades program and Mesalands Community College’s Wind Energy certificate program.
These programs are working with industry partners to prepare New Mexicans for careers as solar and HVAC installers and wind energy technicians.
Our skilled trades unions are also preparing New Mexicans for careers as heat pump installers, electricians, plumbers, and pipefitters.
Our current workforce shortages are a real limiting factor for growing our advanced energy economy in New Mexico.
But if we really invest in proven career training pathways—if we invest in New Mexicans—I know that our state’s workforce can become a real asset.
Over the last century, New Mexicans have built a proven track record of powering our country.
I know we can do it again.
To make this happen, we have to be able to deliver all of the clean energy produced in New Mexico to market.
That requires making the permitting process for high-voltage transmission lines much faster.
These transmission lines will be the backbone of our clean energy future.
And they are the key to maintaining New Mexico’s energy leadership.
Permitting reform doesn’t mean greenlighting every single project or lowering the bar on environmental protection.
It just means getting to a “Yes” or a “No” in a matter of years — not over a decade and a half — like with SunZia.
I just introduced legislation called the FASTER Act to establish simpler, coordinated agency reviews for significant, interregional transmission projects.
The FASTER Act would empower and require the Federal Energy Regulatory Commission to approve or deny applications for these transmission lines within a predictable three-year timeframe.
It would deliver tangible economic benefits through easement payments to local communities, states, and counties along the route of new transmission lines.
My bill also encourages developers to follow best practices like those Pattern Energy did voluntarily with SunZia.
I have also proposed creating a 30% federal investment tax credit for significant transmission projects.
These tax credits will encourage long-term financial commitment to the grid, much like the Inflation Reduction Act’s tax programs have done for clean energy manufacturing and deployment.
We also need to keep investing in technological innovation.
If we want to achieve a fully decarbonized energy future, we are going to need even more solutions.
I am proud that researchers in New Mexico—at our national labs, research universities, and private companies—are on the forefront of promising new energy technologies.
That includes everything from enhanced geothermal systems and concentrating solar power to small modular nuclear reactors and electrolysis for generating green hydrogen.
These advanced energy technologies are much earlier on the adoption curve than solar panels, wind turbines, or battery storage technologies.
But each of them offers promising potential — especially in terms of harder-to-decarbonize end uses like heavy-duty transportation and energy-intense industrial processes.
In some cases—like enhanced geothermal systems—there might also be real alignment of skills with our state’s existing oil and gas workforce.
That’s because enhanced geothermal systems will rely on drilling and detection technologies that are familiar to our existing oil and gas workforce.
While there is rarely a one-for-one transfer of skill, this comes awfully close.
The largest limiting factor for geothermal energy development up to this point has been cost.
But that is changing as we speak - thanks to advancements in drilling technologies and subsurface data analysis.
And in the last few years, innovative private sector companies like Fervo and Eavor have begun to recognize that New Mexico is a natural testbed for advanced geothermal technologies.
That’s thanks to both our geology and our proven energy workforce.
Earlier this year, Eavor announced that it successfully drilled the deepest and hottest directional geothermal well in history—right here in New Mexico.
This was the latest example of New Mexico being on the cutting edge of this emerging field.
But we need to be strategic to make the most of this opportunity.
I was encouraged by the Legislature’s overwhelming passage of Senator Jerry Ortiz y Pino’s Geothermal Resource Development Act in the last session.
That bill would have created a Center of Excellence for geothermal innovation at New Mexico Tech.
It clarified the State’s laws around geothermal development.
And it created a Geothermal Projects Development Fund for grants and loans to spur more innovation in this emerging sector.
This is exactly the type of forward-looking, advanced energy policy that we should be embracing to put New Mexico in the best competitive position to lead.
I hope the Legislature takes another run at this in the coming session.
We can’t afford to miss opportunities like this if we want New Mexico to lead in emerging energy fields.
We can be proactive rather than reactive in our economic development strategies in this rapidly evolving sector.
We can support companies that rightly see New Mexico as an ideal place to develop and manufacture a wide range of advanced energy technologies.
There is no time to waste if we want to get out in front of the energy transition before it passes us by.
That requires urgently expanding our state government’s staffing levels.
Without staffing up our state agencies, we can come up with good ideas and deliver investments.
But they won’t reach New Mexicans.
A lot of hard work and foresight went into passing laws like the Energy Transition Act and the Community Solar Program.
But we need to staff up our state agencies to improve the implementation of these policies.
That goes for effective state-level implementation of federal policies and investments, too.
Let me give you just one example.
I announced last year that the State of New Mexico and Tribes here will receive $87 million from the Inflation Reduction Act to establish Home Electrification and Appliance Rebates and Home Efficiency Rebates.
These rebates will help New Mexicans save money on heat pumps for home heating, cooling, and water systems, induction stovetops, and other electrification upgrades in their homes.
These electric appliances create major health benefits by replacing dirty fossil furnaces and gas stoves that are burning dangerous compounds into the indoor air in our homes.
They are also more efficient and less expensive to operate over their service lives.
That means they will help New Mexico families realize substantial savings on their monthly utility bills.
The U.S. Department of Energy issued guidance for State and Territorial Energy Offices on the implementation of the Home Energy Rebate Programs in July.
Now, the State Energy, Minerals and Natural Resources Department needs the state staffing budget to stand-up these programs to maximize the benefits to New Mexico families.
I want to be sure that New Mexico works quickly to use our full allocation of federal funds for this program.
Otherwise, we could see our funds get siphoned off by states like California and Maine, who are moving quickly to set up their state rebate programs.
And that, right there, is the through line to all of this: acting with urgency.
This is a pivotal moment of change and a time of unprecedented opportunity for New Mexico to lead.
How quickly we can get up to speed will determine how much our state will benefit from the vast changes and opportunities that are already underway.
Transformative change across our power generation, our transportation, and our industrial and building sectors is happening, more quickly than many of us realize.
The way that New Mexico responds to this change is up to all of us.
Our children are depending on us to get this moment right.
Done right, we will continue to create projects that export clean electrons, while importing capital and creating careers in the skilled trades that New Mexicans can build their families around.
We will establish new industries.
We will reshape our state’s entire economy.
We will deliver for New Mexicans.
