Pueblo of Nambe - 1995 Project

Project Overview
Tribe/Awardee: Pueblo of Nambe
Location: Santa Fe, NM
Project Title: Feasibility Study of a 1 mW Solar Electric Generating Facility on the Nambe Pueblo
Type of Application: Feasibility
DOE Grant Number: DE-FG48-95R810563
Project Amounts:
DOE: $152,294
Awardee: $0
Total: $152,294
Project Status: Complete  More
Project Period
of Performance:
Start: September 1995
End: December 1997

Project Description

Introduction

The Nambe Pueblo is located just north of Santa Fe, N.M. The Pueblo is seeking to develop cost-effective, environmentally sensitive supplies of energy. The Nambe Development Corporation, a federally chartered Indian Business Corporation, is the Pueblo's development arm; its mission is to promote the economic development of the Nambe Reservation in a manner consistent with the social and cultural interests and values of the Nambe Pueblo.

On April 19, 1995, the Nambe Tribal Council unanimously passed Resolution NP95-016, which authorized the Nambe Development Corporation to submit a proposal in response to the U.S. Department of Energy's (DOE) Title XXVI competitive grant program. Title XXVI of the Energy Policy Act of 1992 (EPAct) "provides support to Indian tribes to develop the institutional capacity to participate fully in the development of energy resources located on the reservation, become more self-sufficient, and control the development of natural resources located near their lands."

On behalf of the Nambe Pueblo, the Nambe Development Corporation was awarded a Title XXVI grant in September 1995. The Nambe Title XXVI proposal, which was the basis for the grant award, described a study that would analyze the feasibility of a 1 mW photovoltaic (PV) bulk generating station on the reservation. The results of this analysis are contained in this report. Because the 1 mW facility is such a complex and ambitious project, the Nambe Development Corporation has also undertaken feasibility analyses for several other, smaller-scale PV projects that would be less capital-intensive and could be undertaken immediately. The results of these separate analyses are also contained in this report.

The Nambe Development Corporation has undertaken its Title XXVI program to document the ways in which a clean energy enterprise or the use of clean energy technologies may enhance the Pueblo's style and scale of community development and its environmental and cultural values. The Nambe Pueblo has an abundant solar resource. The Nambe Development Corporation determined that exploring the feasibility of harnessing the solar resource available on the reservation for the production of clean energy and/or to realize energy savings for reservation residents using clean energy technologies is consistent with the tribe's economic, social, and cultural development and preservation priorities. The Nambe Development Corporation further determined that PV technologies, both grid-connected and for off-grid purposes, represent the best opportunity for the tribe to develop its solar resource.

Goals and Objectives

The Nambe Pueblo is examining the feasibility of two options for PV applications. The first is a 1 mW bulk generating station that would be connected to the electrical grid, and which is the larger subject of the tribe's Title XXVI grant. The power from this plant could be provided to reservation residents, sold to the local utility (or to some combination of the two), or "wheeled" to other retail customers.

The second option being considered by the Nambe Pueblo includes a variety of smaller, off-grid PV applications. Off-grid PV projects could give the Nambe Pueblo an opportunity to become oriented to and educated about PV technology while meeting important, if small, current electrical needs on the reservation.

The photos show scenes on the Nambe reservation, including:  the Pueblo headquarters building, Nambe Lake, and a possible site for a 1 MW PV system near highway 285.

The Nambe Pueblo has an excellent solar resource, which could be converted to electricity through photovoltaic (PV) systems. The Title XXVI project examined the technical and economic feasibility of constructing a 1 MW PV system to generate bulk power to sell onto the grid. That option would not be economical without a large "green power market", although several smaller applications are potentially feasible.

Project Actions and Resultant Data

The Electric Utility Industry in the Western U.S. and on the Nambe Reservation

The generation of electricity consumes a significant portion of the conventional and renewable resource base of the western U.S., and electric utilities are an important force in the economy of the region; the region's utilities account for almost $10 billion in revenue and employ 39,500 people. The regulatory and market environment, as well as the operation of the electric utility industry throughout the nation, are undergoing various and rapid changes at the federal, state, and regional levels. This dynamic is often referred to as "industry restructuring" and has been considered in depth in relation to the photovoltaic projects being analyzed by the Nambe Development Corporation.

The Nambe Pueblo is currently served by Jemez Mountain Electric Cooperative. Residential ratepayers on the Nambe Reservation pay approximately 10.8 cents/kWh for electricity, whereas the average residential rate for New Mexico is approximately 9.1 cents/kWh. These rates are substantially higher than the national average of about 8 cents/kWh.

The Feasibility of a 1 mW PV Generating Station on the Nambe Reservation

In assessing the feasibility of a 1 mW generating station on the Nambe Reservation, many important factors were considered. These include:

  • Potential demand for PV generated electricity, at the regional and local levels and on the Nambe Reservation.

  • Utility benefits from grid-connected PV technologies.

  • Barriers to utility use of PV technologies.

  • Technical aspects of PV systems and the solar radiation available at Nambe.

  • Design assumptions for a 1 mW PV plant at Nambe, including capacity factor, size of the system, land use requirements, and cost.

  • Potential environmental benefits associated with a 1 mW PV plant at Nambe.

As a result of the analysis of these factors, an economic evaluation of the 1 mW PV plant at Nambe was rendered. The economic assessment of the 1 mW PV plant at Nambe indicates that the project, from a strictly economic perspective, is not financially feasible. The negative net present value ($2.5 million), a 19-year payback period, and the high levelized cost of energy generated at the plant (21 cents/kWh) are all economic indicators that would tend to make investors leery of the project. Even though the levelized cost of energy from a Nambe 1 mW PV plant would be slightly lower than the national average for PV (27.4 cents/kWh), the 21 cents/kWh is still substantially higher than the levelized cost of energy from coal (5.4 cents/kWh) and even wind (6.8 cents/kWh). The Nambe feasibility study does examine the potential power marketing opportunities available to the Nambe if it were to become an independent power producer and were able to "wheel" power to retail customers throughout the Southwest, particularly to those interested in "green power". However, these scenarios are extremely laborious and costly as well.

As a result, the Nambe Development Corporation analyzed several off-grid PV applications that would provide economic benefit to the Pueblo by meeting an existing need for power on the reservation and which would provide the Pueblo with hands-on experience with photovoltaic technology that may be used in the construction and deployment of a 1 mW plant in the future, when either costs come down or the marketplace is sufficiently open and competitive that the Pueblo would be able to sell its power to the niche market of "green consumers".

Alternatives to the 1 mW PV Generating Station

The Nambe Development Corporation selected several smaller-scale PV projects for inclusion in its Title XXVI feasibility study. Each project has the potential to catalyze additional economic development on the reservation and to be highly visible and attractive to funding entities. The small-scale PV projects that were analyzed include:

  • A restroom and information center at the Nambe Falls recreation area.

  • Lighting for the parking lot at the Nambe Falls recreation area.

  • Water pumping and lighting at the Nambe buffalo corral.

  • Lighting for the parking lot in front of the Nambe Development Corporation office.

The smaller scale PV projects would all require a significant capital investment by the tribe, however the initial investments required for each project are not so prohibitive that the tribe could not attract potential funders to share in the costs. These projects have the potential to be high profile and demonstrate state-of-the-art technologies, which could be attractive features to potential funders. Generally, the small-scale projects tend to be more costly than conventional electrification, however they represent an important opportunity for the Nambe Tribe to exercise energy independence; once the costs of the systems are paid, there are no on-going payments made to an outside power provider, whereas, if these projects were conventionally electrified, the Nambe Pueblo would pay Jemez for electrical service over the life of the system. These projects also afford the Nambe Pueblo with an opportunity to learn about PV technologies and explore other possible applications that could be appropriate for the reservation.

Socioeconomic Impacts of the Nambe PV Projects

There are no significant employment opportunities created by the 1 mW plant or the smaller-scale PV projects because of the low operation and maintenance requirements of both projects. While the 1 mW PV plant could create two to three full-time jobs during the construction phase, only one job would likely be sustainable over the life of the system.

There are significant negative land use and infrastructure impacts associated with the I mW PV plant in that the identified sites for the projects will cause adverse visual impacts for tribal members and travelers on New Mexico State Highway 285. In addition, access to transmission infrastructure is problematic at both sites, requiring line extensions at a minimum or construction of new transmission lines. Both sites also require roads to be constructed in order to reach the site, which adds to the overall cost of the system and creates significant impacts on the reservation. The smaller-scale projects however, are not plagued with these negative impacts.

Results, Conclusions, Findings, and Recommendations

The intent of the Nambe Pueblo's original proposal to DOE was to attempt to link a sustainable energy technology with economic development priorities on the reservation. In fact, the language of Title XXVI, contained in the Energy Policy Act of 1992, and the Department's competitive solicitation, hold out the promise of renewable energy as an economic development opportunity well suited for Indian Country. While renewable energy development (using photovoltaic technology) is very compatible with the cultural and developmental goals of the Nambe Pueblo, namely pursuing environmentally sustainable development, from a strictly economic standpoint, it is highly incompatible with the tribe's cultural and developmental goals.

In light of the notion espoused in Title XXVI of the Energy Policy Act and in the DOE solicitation that renewable energy represents an economic development opportunity for tribes, it is important to note that neither the 1 mW PV plant nor the smaller scale projects hold out any real opportunity for revenue generation for the tribal government or employment for tribal members. In fact, the l mW plant could be a tremendous financial burden on the tribal government if it decided to pursue construction.

There has been much discussion among representatives of the electric utility industry, the renewable energy industry and in Indian Country about the economic development promise that renewable energy holds for tribes. It is true that tribal lands are the location of abundant renewable resources and that the development of these resources is highly compatible with an environmental ethic that many tribes profess. It is also true that there are major flaws in the way in which economic value is measured; the kWh cost of coal fired electricity does not reflect the negative environmental externalities associated with it, nor does the kWh cost of PV electricity reflect the environmental benefits associated with it. However, there are certain economic and market place realities that cannot be ignored.

The electric utility industry is moving steadily toward increased competition, which will continue to force power providers to supply reliable electricity at the lowest cost, leaving any investments in renewable energy, particularly PV, highly unlikely in the near future. It is possible that consumers with a preference for green power will be effective in stimulating utility investments in renewables, but this market dynamic is very uncertain. Except for remote applications, renewable energy development on Indian lands does not represent the economic development boon many have advocated. This does not mean it is not a worthy pursuit for tribes, however; the Nambe Development Corporation has determined that it must be very prudent in utilizing PV technologies in reservation development initiatives.

Project Status

For current project status or additional information, contact the project contacts.

Project Contact

The Nambe Pueblo
Route 1, Box 117-BB
Santa Fe, NM 87501
Telephone: (505) 455-2036