Facebook Green Energy Targets Accelerating Transition in New Mexico: IEEFA Report

“While the state of New Mexico gave Facebook ample taxpayer-supported incentives to build at Los Lunas, such incentives are not uncommon, and they don’t always work,” notes the report. “What sets the Los Lunas example apart are its clearly beneficial local economic impacts and its market-moving renewable energy requirements.”

May 18, 2020. By News Bureau

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Construction of a major Facebook data center in Los Lunas, New Mexico, has elevated the local economy and accelerated the state’s transition toward renewable-powered electricity, settles a report published recently by the Institute for Energy Economics and Financial Analysis (IEEFA).

The report—Corporate Renewables Case Study: Facebook’s Green Energy Goals Are Speeding the Transition of New Mexico’s Electricity Sector—details how a Facebook data complex that broke ground in 2016, and that is now being expanded from 973,000 to 3 million square feet, has increased municipal revenues, created local jobs and driven Public Service Company of New Mexico (PNM) to speed the buildout of utility-scale solar and wind statewide.

“While the state of New Mexico gave Facebook ample taxpayer-supported incentives to build at Los Lunas, such incentives are not uncommon, and they don’t always work,” notes the report. “What sets the Los Lunas example apart are its clearly beneficial local economic impacts and its market-moving renewable energy requirements.”

The report recommends the data-center business is more pandemic-resistant than much of the economy, as businesses and households rely increasingly on the Internet.

Report Highpoints:

  • Los Lunas gross receipts tax (GRT) revenues, the main source of municipal funding in the state, have increased by 85 percent since Facebook came to town.
  • The data center is driving a rapid shift toward renewable energy by PNM, which is projected now to get 43 percent of its power generation from wind and solar by 2023, up from 9.6 percent in 2013.
  • Coal, once the mainstay of PNM’s generation, will account for 6.1 percent of the utility’s power needs within two years.
  • The Los Lunas model could be replicated in any number of communities seeking fiscal and payroll stability built on economic diversification and sustainable energy models.

Karl Cates, an IEEFA analyst and lead author of the report, said the New Mexico example is one that can be replicated widely as corporate buyers of electricity push their preference for clean energy. “These early results make the model one worth considering elsewhere, particularly given expectations of continued strong growth in the tech sector as the COVID-19 pandemic creates lasting effects that will keep commerce and cultural activities more digitally reliant than they have been historical.”

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