SunZia wind project in New Mexico, Arizona could generate $20.5B impact

Apr. 4—The total economic impact from construction and operation of Pattern Energy's massive SunZia transmission and wind-generation project, expected to break ground this summer, could reach $20.5 billion over 30 years, according to a new study.

The full SunZia transmission project, which developers first began planning in 2008, could eventually carry up to 4.5 gigawatts of wind energy over two high voltage lines running from Central New Mexico to south-central Arizona for sale in western markets.

Southwestern Power Group, the initial developer, had originally planned to build both lines, including a 1.5 GW alternating current, or AC line, and a 3 GW direct current, or DC line, with Pattern Energy as the anchor tenant who would transport electricity from its New Mexico wind farms over SunZia.

But Pattern acquired the rights to the 3 GW line last summer, and now plans to build that transmission line alongside development of 3.5 GW of new wind energy. That includes nearly 1,000 turbines it plans to install in Lincoln, Torrance and San Miguel counties, spanning about 600,000 acres of private and state trust lands.

The company previously said it will invest about $8 billion to build the DC transmission line and the new wind farms. But a new study by research firm Energy, Economic & Environment Consultants LLC, released Tuesday morning, now estimates the total economic impact over the full 30-year life of the project could reach $20.5 billion.

That includes $16.2 billion in direct capital spending, ongoing operations over three decades, and payments to landowners for hosting transmission lines and wind turbines on their property.

The project will also generate about $1.3 billion for local, state and federal governments through taxes and payments to agencies like the State Land Office, plus corporate sponsorships in rural communities. Another $3 billion in indirect and "induced" benefits will accrue from spending on local goods and services, and from the overall impact of increased local development on rural households and communities, according to the study.

Gov. Michelle Lujan Grisham called it a win-win when tallying both the environmental benefits and economic impact from SunZia, which Pattern calls the largest renewable project ever planned to date in the U.S. and throughout the Western Hemisphere.

"New Mexico is proud to be the home of the largest clean energy infrastructure project in U.S. history, and we are eager to realize the economic and environmental benefits this project will provide," Lujan Grisham said in a statement Tuesday morning. "Clean energy is the key to meeting our climate goals and building a lower carbon future, and a project like this one that also generates billions in economic impact makes this a clear win for New Mexico."

Not all benefits will accrue in New Mexico. Arizona will see about $1 billion in economic impact from that portion of the SunZia line built in that state, according to the study. And, about $12.1 billion of the remaining $19.5 billion impact will flow to out-of-state suppliers, although the physical assets that Pattern purchases from them — such as wind towers and transmission infrastructure — will be installed in New Mexico.

But that still leaves about $7.4 billion in local impact, including some 2,000 jobs expected during peak construction, plus about 110 permanent jobs when the transmission line and wind turbines come online in 2026.

SunZia has all local, state and federal permits in place to begin construction, with only the U.S. Bureau of Land Management's final decision on the transmission line still pending. But the BLM is expected to fully green light SunZia in May, concluding a 15-year effort by developers to receive the needed approvals.

"All the difficult work is complete, and the BLM is now making final checks on its environmental impact statement," Pattern CEO Hunter Armistead told the Journal. "That process is tracking to early May ... and almost immediately thereafter we would be ready to begin work."

SunZia has weathered major hurdles over the years through lengthy and contentious permitting processes and opposition from conservation groups who feared the transmission line — which will cross the Rio Grande south of Belen — could be lethal to wintering flocks of sandhill cranes and other birds that may fly into the line.

To mitigate those impacts, Pattern will deploy near-ultraviolet illumination devices, plus bird flight diverters that spin in the wind and reflect light, along sensitive areas to scare birds away. It's also financing wildlife conservation studies and buying up targeted lots of land to convert into avian safe havens, said Pattern spokesman Matt Dallas.

"We're doing some truly innovative things, some of which are new for transmission projects," Dallas told the Journal.

For Pattern, SunZia represents the peak of its work in New Mexico, following its opening last year of a 155-mile Western Spirit transmission line in Central New Mexico that included 1 GW of new wind farms totaling a $1.8 billion investment, Armistead said.

"SunZia is the most ambitious renewable energy venture that's ever been attempted, and we consider it a culmination of our commitment to New Mexico," Armistead said. "Western Spirit was sort of a dress rehearsal for SunZia, even at $1.8 billion. But this is really the main event."