Facebook data center to power renewable energy development in New Mexico

New Mexico Gov. Susana Martinez announced Sept. 14 that Facebook has chosen New Mexico for the site of a new high-tech data center, with that project to spur major renewable energy development since Facebook wants the facility powered by renewables.

The data center will be built in the Village of Los Lunas, and the project’s initial phase will bring thousands of long-term construction positions and an initial investment of $250 million in investment – with the potential for multiple phases down the pipeline.

“Facebook is a stellar, cutting-edge, high-tech company, and it’s an honor to welcome them to New Mexico,” said Gov. Martinez. “Making our state more competitive for jobs and new investment is critical to growing our private sector and diversifying our economy.”

Facebook has committed to buying local materials and hiring local employees to the greatest extent possible, as it prepares to build and staff a facility that will span more than 510,000 square feet in its initial phase.

“We’re thrilled to have found a home in New Mexico and embark on this new partnership with the State of New Mexico and the Village of Los Lunas,” said Tom Furlong, Vice President of Infrastructure at Facebook. “Everything here has been as advertised — from the great set of community partners and strong pool of talent to the opportunity to power our facility with 100% renewable energy.”

Construction on Facebook’s data center will begin later this year, and it is expected to come online in late 2018. Facebook will power the facility with 100% renewable energy created by new solar and wind farms. The renewable energy supply will initially be composed of three new solar facilities built by an affiliate of Public Service Co. of New Mexico (PNM), with additional wind and solar energy secured in the future. The new solar and wind energy farms would not be built without the data center investment.

The utility is part of PNM Resources (NYSE:PNM).

Said PNM CEO Pat Vincent-Collawn: “From an energy standpoint, this is a game-changing economic development project, but beyond that, it’s a testament to the potential of New Mexico to attract some of the greatest companies in the world to our state.”

PNM’s Facebook deal got quick regulatory approval

The New Mexico Public Regulation Commission on Aug. 17 had approved on an expedited basis an application from PNM for aspects of the Facebook deal, including power purchase agreements (PPAs), Special Service Rate and Special Service Contract, New Green Energy Rider, exemption from Energy Efficiency Rider and certain variances.

PNM stateed in that case that Facebook’s load is expected to come on-line in phases over time with the initial phase projected to reach approximately 60 MW and, depending on future expansions of its data center facilities, Facebook projects that its data center load could reach over 100 MW in the future. PNM said that substantial new load from a relatively large new customer helps improve PNM’s system load factor and can benefit PNM’s other customers. Further, PNM stated that the data center’s service voltage level will be at 115 kV and that Facebook will need, and has agreed to pay up front for the cost of, the extension and interconnection of PNM’s 115 kV system to the site of a data center in PNM’s service territory.

PNM testified that, under the Green Energy Rider, the entire cost of the “Initial Solar Facilities” PPAs will be passed through to Facebook based on the application of the Green Energy Rider rate to the monthly production of the 30 MW of solar generation procured pursuant to the Initial Solar Facilities PPAs.

The Initial Solar Facilities will be located load-side and connected directly to PNM’s distribution system. Specific sites have not yet been selected as of the Aug. 17 commission approval, although there is a short list of suitable sites being evaluated in Valencia, Bernalillo, San Miguel, Sandoval and Santa Fe counties. Disclosure of preferred site locations at this time could affect negotiations to acquire the sites at the lowest reasonable cost. The specific sites of the solar facilities will be selected and reported by PNM to the commission as soon as practicable.

Construction time for the Initial Solar Facilities, including procurement of the equipment and land, is expected to take nine to twelve months from the date on which Facebook provides PNM with notice that it has chosen to locate its data center in New Mexico. PNM is expecting the in-service dates to be in the first half of 2018 as Facebook’s load grows sufficiently to justify the 30 MW of new capacity.

About Barry Cassell 20414 Articles
Barry Cassell is Chief Analyst for GenerationHub covering coal and emission controls issues, projects and policy. He has covered the coal and power generation industry for more than 24 years, beginning in November 2011 at GenerationHub and prior to that as editor of SNL Energy’s Coal Report. He was formerly with Coal Outlook for 15 years as the publication’s editor and contributing writer, and prior to that he was editor of Coal & Synfuels Technology and associate editor of The Energy Report. He has a bachelor’s degree from Central Michigan University.