Texas-Based Utility Teams Up with Mitsubishi Power to Explore Carbon Reduction Opportunities

El Paso Electric (EPE) and Mitsubishi Power have signed a joint development agreement (JDA) “creating a collaboration framework to jointly develop projects that will enable EPE to achieve its clean energy goals.”

EPE is a regional electric utility providing generation, transmission, and distribution service to approximately 444,300 retail and wholesale customers in a 10,000-square-mile area of the Rio Grande valley in west Texas and southern New Mexico. Its service territory extends from Hatch, New Mexico, to Van Horn, Texas. EPE has established bold carbon-free energy goals including a commitment to 80% carbon-free energy by 2035 and the pursuit of 100% decarbonization of its generation portfolio by 2045.

Kelly Tomblin, EPE’s CEO, spoke to POWER during the Experience POWER conference, which was held in San Antonio, Texas, this week. “We’re thrilled right now that we’re probably around half of the carbon footprint of most utilities in Texas and a third of the carbon footprint of the utilities in New Mexico, where we [also] do business. We’re proud that we eliminated coal early on [2016], but what we do know now is that we don’t have responsive generation to support further renewable development, and we have 270 MW of renewables positioned to come on in the next couple of years,” she said.

Paul Browning, CEO of Mitsubishi Power Americas, who was also in attendance at the Experience POWER show, told POWER that his company is interacting with customers in a much more comprehensive way than it has in the past. “It’s all around this need to get to net-zero,” he said. “As more and more of our customers set these net-zero targets—like Kelly just described for El Paso Electric—we’re signing joint development agreements where we come in and we help them sort of develop their strategy to get to net-zero. And one of the most important parts of that strategy—and one of the newer parts—is hydrogen and the role that hydrogen is going to play in helping bring even more renewables onto the grid.”

Energy Storage Through Green Hydrogen

POWER’s new HydrogeNext event was co-located with Experience POWER in San Antonio. The benefits hydrogen could provide to a decarbonized power grid were highlighted during a panel discussion that Browning participated in with leaders from Entergy and the Green Hydrogen Coalition to open the conference on Monday afternoon. Later, Browning told POWER that, like EPE, many power companies have shifted from coal to natural gas-fired generation to reduce emissions, but to get to net-zero, they will eventually have to use less gas. “That’s what really led us to green hydrogen,” he said.

“The neat thing about green hydrogen is that not only as we transition from natural gas to hydrogen [does it] allow them to use less natural gas, it also allows them to store renewable power,” Browning said. He suggested that because wind and solar are not baseload resources that can be dispatched at high capacity factors on demand, much more capacity must be added to the grid than is needed when systems are operating at peak output. “At some times of the year—some times of the day—we’re going to be producing more renewable power than we need,” he explained. “Right now, that renewable power just gets curtailed and wasted. We’ll have a technology that can actually store that renewable power as hydrogen, and then make it available to use later instead of natural gas.”

In the case of EPE, how that green hydrogen would be stored is still an unknown. Browning and Tomblin said that’s one of the things the JDA (Figure 1) is designed to explore. “We do have a salt dome in Delta, Utah, which is not that far away from El Paso, so that’s one option that we could look at and connecting it through pipeline, but we’re looking at other options that would be more local,” Browning said. “That’s what our teams are going to be working together on.”

“I think that’s a real important note, because hydrogen is getting so much attention right now that we have to realize that we have to pursue things we don’t have every answer for,” said Tomblin. “I think there’s sometimes a hesitancy, or has been in the utility space, not to really go very aggressively to the somewhat of the unknown, and I think that’s where we are now, we’re willing to explore something together and find the answers over time.”

Newman Unit 6

Meanwhile, the two companies have already been working together to construct a new gas-fired unit. In January 2021, EPE selected Mitsubishi Power’s 228-MW Smart M501GAC enhanced response (SmartER) gas turbine, which will be added to EPE’s fleet as Newman Unit 6. The unit will allow EPE to decommission older, less-efficient generating units.

“We need responsive generation—one that starts quickly,” Tomblin said. “We selected Mitsubishi for a number of reasons. We love their Smart turbine, but more than that, we see the same commitment that we have to using technology to make sure that we’re meeting our clean energy goals. So, we’re looking forward to the vast amount of experience and knowledge they bring, and we’ll begin now. Actually, we’re starting to construct soon—very soon—the next month or so.”

“What El Paso Electric has purchased is our most flexible gas turbine. This gas turbine is capable of starting very quickly, ramping up very quickly, ramping down very quickly. It’s exactly the kind of resource you need to offset that intermittency of renewables that I talked about earlier,” Browning said. “As El Paso Electric puts more and more renewables on the grid, they have a greater and greater need for this super-flexible, peaking power plant that can offset that intermittency. But then again, what’s really important about the investment they’ve made is they’ve invested in a product that has a future of 100% hydrogen capability. And so, they’re basically future-proofing this asset so that it’s not just what they need today, it’s also what they need in the future.”

In addition to using natural gas more efficiently than older units, Newman Unit 6 will reduce EPE’s water consumption by 600 million gallons per year, which is important in the southwestern U.S. EPE said continued development of its region has increased customer demand for energy by about 2% per year and that Newman Unit 6 is essential to keep pace with the region’s growth. The new gas turbine is expected to enable EPE to triple its renewable energy portfolio, maximize responsiveness to the intermittency of renewables with rapid dispatch capability, and reduce carbon emissions.

Industrywide Collaboration

Mitsubishi Power’s JDA with EPE is just one of several the company has in place, with more potentially on the way. Browning said the agreements really benefit all parties involved. “We learn from our customers every day,” he said, suggesting JDAs allow Mitsubishi Power to facilitate industrywide knowledge sharing around net-zero solutions. “Everybody’s trying to solve the same problem, but every utility has a different set of constraints,” he said. “Being able to learn from one another and understand what worked for Entergy, what worked for El Paso Electric, what worked for Puget Sound Energy—that’s an important role that we’re hoping to play.”

Tomblin agreed. “It does give us an industry working group of sorts to learn together, so that, I think, is a really important aspect of the JDA and our partnership,” she said.

—Aaron Larson is POWER’s executive editor (@AaronL_Power, @POWERmagazine).