An Analysis of PNM's Renewable Reserve Requirements to Meet New Mexico's Decarbonization Goals
Over the next three years, the Public Service Company of New Mexico (PNM) plans to increase utility-scale solar photovoltaic (PV) capacity from today’s roughly 330MW to about 1600MW. This massive increase in variable generation—from about 15% to 75% of peak load—will require changes in how PNM operates their system. We characterize the 5 and 30-minute solar and wind forecast errors that the system is likely to experience in order to determine the level of reserves needed to counteract such events. Our focus in this study is on negative forecast error (in other words, shortfalls relative to forecast) – whereas excess variable generation can be curtailed if needed, a shortfall must be compensated for to avoid loss of load. Calculating forecast error requires the use of the same forecasting methods that PNM uses or a reasonable approximation thereof. For wind, we use a persistence forecast on actual 5-minute 2019 wind output data (scaled up to reflect the amount of wind capacity planned for 2025). For solar, we use a formula incorporating the clear sky index (CSI) for the forecast. As the solar on the grid now is a small fraction of what is planned for 2025, we generated 5-minute solar data using 2019 weather inputs. We find that to handle 99.9% of the 5-minute negative forecast errors, a maximum of 275MW of variable generation reserve during daylight hours, and a maximum of 75MW during non-daylight hours, should be sufficient. Note that this variable generation reserve is an additional reserve category that specifies reserves over and above what are currently carried for contingency reserve. This would require a significant increase in reserve relative to what PNM currently carries or can call upon from other utilities per reserve sharing agreements. This variable generation reserve specification may overestimate the actual level needed to deal with PNM’s planned variable generation in 2025. The forecasting methodologies used in this study likely underperform PNM’s forecasting – and better forecasting allows for less reserve. To obtain more precise estimates, it is necessary to consider load and use the same forecasting inputs and methods used by PNM.