In an opinion piece for the Albuquerque Journal, United's Michael Barrio and Brian Turner discuss how New Mexico can meet growing energy demand by maximizing the use of distributed energy resources (DERs) and virtual power plants (VPPs). The article calls on state leaders to establish clear policies that unlock the full potential of existing advanced energy technologies to lower costs and strengthen grid reliability for all New Mexicans.
In New Mexico, the end of summer used to mean morning hikes and afternoons playing outside with friends. Now, record heat forces families indoors, blasting air conditioning, glued to screens and watching their energy bills climb higher as demand for electricity increases.
Many households are already struggling, with families below the federal poverty line spending an average of 16% of their annual income on energy costs, compared to the state average of 3%. With energy demand rising and bills already unaffordable, it’s clear something needs to change.
The traditional approach to increasing energy demand has been to build more energy infrastructure, including new power plants. While some new infrastructure is still needed, relying solely on this approach will be more time-consuming and expensive, forcing families to pay higher bills than necessary.
Conveniently, the answer to more affordable and reliable electricity can be found all around us on our roofs and in our garages. Utilities around the country are already tapping into “Distributed Energy Resources” like smart thermostats and electric vehicles, and it’s encouraging to see these conversations happening in New Mexico, as was on full display at the recent Building an Advanced Energy Ecosystem conference.
One of the biggest opportunities lies in resources hidden in plain sight. According to PNM, there are more than 47,000 rooftop solar systems across the state, yet fewer than 1% of those systems have battery storage, meaning that most of that affordable, clean power can’t be tapped when it’s needed most. Other distributed energy resources, such as electric vehicles and smart thermostats, also carry untapped potential. If these technologies work together, they can reduce peak demand. However, without coordination and the right framework, that potential sits idle.
Virtual power plants (VPPs) offer a practical solution. VPPs remotely coordinate everyday home devices, like rooftop solar, smart thermostats, batteries, and EVs, so people can generate, store, and shift energy at home. Managed together, these devices can provide the same peak capacity and reliability as a traditional peaker plant, only cleaner, cheaper and faster to deploy. VPPs are also critical for reducing the cost and increasing the reliability of the electric distribution system, including in rural areas.
VPPs can help families and businesses adopt electric technologies, from vehicles to home batteries, by providing stable, long-term compensation to offset the purchase price. And as more New Mexicans go electric, there will be more VPP resources for the utility to call on to reduce electric costs. It’s a virtuous cycle.
Currently, the lack of policy remains the biggest barrier, which is why state leadership is essential. Without clear direction, utilities have less incentive to prioritize empowering customers with VPPs. All corners of New Mexico’s government must act decisively to create a framework that unlocks the full potential of distributed energy resources and VPPs to make clean, affordable power accessible to us all.
Other states are already moving. Colorado, Arizona, and Utah have launched VPP programs that let households earn money from the distributed energy resources they already own. New Mexico should do the same, accelerating electrification and lowering costs through a predictable, reliable framework for rewarding consumers.
Policies that advance virtual power plants offer a practical, cost-effective way to create a more flexible energy system to address rising energy costs and rising demand. Taking action now can help address energy affordability challenges and ensure a more reliable and affordable future for all New Mexicans.
Read the full article here.