December 4, 2013

Maine wind project could create 340 jobs, $120 million in investment

The PUC will decide if the pilot power project using floating turbines has enough positives to be worth the cost to ratepayers.

By Tux Turkel tturkel@pressherald.com
Staff Writer

Building the first phase of a floating wind-power project off Maine’s coast would create as many as 341 jobs and trigger at least $120 million in investment, with half of it going to Maine-based companies, according to a draft power-purchase contract to be filed Wednesday with the state.

click image to enlarge

A lobster boat passes the country’s first floating wind turbine, off the coast of Castine, in September.

Robert F. Bukaty/2013 Associated Press file

Related Documents

Contract terms of Maine Aqua Ventus project
Proposed term sheet from the wind farm's developers.

The investment would add a small charge for 20 years to Central Maine Power Co. bills. An average home customer would pay an additional 73 cents a month at the start, $8.70 in the first year.

Advocates hope the pilot project will set the stage for a deep-water wind power industry in Maine that could create thousands of jobs and billions of dollars in spending over time.

“It’s really an overall investment in the future,” said Jake Ward, vice president for innovation and economic development at the University of Maine, which is a partner in the Maine Aqua Ventus project.

The state Public Utilities Commission will have to decide whether the project is a good deal, during deliberations expected next month. A period for written public comment will be set before then.

Next spring, the federal Department of Energy will decide whether the technology behind Maine Aqua Ventus is innovative enough to receive a $46 million grant aimed at creating large wind farms, far out at sea, that can produce power at competitive rates.

At first glance, the project apparently would have a similar impact on ratepayers as the now-defunct project proposed by the Norwegian energy company Statoil, while offering more economic benefits.

TEST MODEL WORKING AS EXPECTED

Maine Aqua Ventus is being proposed by Maine Prime Technologies, a for-profit spinoff that represents the university and two general partners, Maine-based Cianbro Corp. and Emera Inc. of Nova Scotia.

In May, the partners launched a one-eighth-scale model of a floating turbine off Castine. The unit is made of advanced composite materials designed to fight corrosion and reduce weight. Its hull is made of concrete, which can be produced in Maine and has a longer life span in the ocean than steel.

The prototype is now generating a small amount of power and collecting information. It already has endured extreme sea and wind conditions and is performing as expected, Ward said.

The partnership plans to develop a full-scale pilot wind farm off Monhegan Island by 2016. It would consist of two turbines, each with a capacity of six megawatts. Based on the availability of wind, the project is expected to generate 43,000 megawatt-hours a year, enough to power 6,000 average homes.

Beyond an investment of $120 million to $166 million, the full-scale project would have other benefits, according to the draft term sheet to be presented to the PUC:

Half of the money would be spent with companies and workers in Maine. At least $7 million would be spent on services provided by UMaine.

A science, math and technology curriculum linked to the project would be provided to Maine high schools, as well as collaboration with public colleges for training and education programs.

Monhegan Island, which has some of the country’s highest electricity rates, would get some free power from the project. The island also would be connected to the mainland with fiber-optic cable, to boost Internet access speed.

COMPARISON TO PREVIOUS PROPOSAL

The partners say the cost-saving technologies of Maine Aqua Ventus put the project in a good position to win the critical federal funding for a giant, floating wind farm off the coast of Maine that could generate 100 to 500 megawatts. And the expertise developed by the venture could form a research and development cluster that helps build and supply a global, emerging energy sector.

An economic impact report done for the project estimates that a second, larger phase could generate $330 million and 3,077 jobs over five years – and even more spending and jobs if the power output is increased.

Until October, the best hope for fulfilling those lofty ambitions appeared to rest with Statoil. The company had already put a steel, floating turbine in the North Sea. In 2011, it proposed a next-stage, 12-megawatt wind farm off Boothbay Harbor, called Hywind Maine.

Maine law caps the amount of money that electricity customers can pay to help subsidize ocean energy projects. Statoil initially proposed a rate of 29 cents per kilowatt hour, more than three times what a Maine household now pays for energy. The PUC balked at that, and Statoil trimmed it to 27 cents. The additional charge would have added up to $186 million over the 20-year contract. Spread among CMP’s customers, it worked out to about 75 cents a month.

Statoil also made commitments to enhance the project’s economic benefits, including spending at least $100 million to hire local suppliers and contractors for future commercial ventures.

Comparing the costs and benefits of the two projects is a bit tricky because Maine Aqua Ventus’ total impact on ratepayers hasn’t been made available. But in general, the 23 cents per kilowatt hour proposed by Maine Aqua Ventus is not much different. It also includes a 2.25 percent annual increase, to account for inflation.

APPEAL FOR SUPPORT FROM MAINERS

It’s common for pilot energy projects to have above-market rates, because of research and development and economies of scale, such as the expense of running undersea cables from the mainland to only two turbines, rather than several.

But the economic benefits promised by Maine Aqua Ventus appear to exceed what Statoil was offering, in terms of total spending and local hiring and procurement commitments. The concept of building the units onshore with Maine concrete and composite materials, rather than foreign-sourced steel, sets the Maine proposal apart from Statoil’s, Ward said.

“The more money you spend here, the greater the economic impact for Maine,” he said.

Those details will get a fresh look by the PUC, which until last summer had only the Statoil project to consider.

In January, the PUC voted 2-1 to award Statoil a power-purchase contract. Gov. Paul LePage said the potential economic benefits weren’t worth saddling ratepayers with millions of dollars in new electricity costs.

LePage’s distaste for the deal came to a head in June, when he pressured the Legislature into passing a law that had the effect of reopening the PUC’s bidding process. Maine Aqua Ventus responded by submitting its proposal in late August.

Statoil responded to LePage’s political maneuver by putting its $120 million project on hold. In mid-October, the company announced that it was pulling out of Maine. It blamed shifting state policies and said it would redirect investment to a site off Scotland.

In releasing its proposal Wednesday, Maine Aqua Ventus appealed to Maine residents to support the project, saying it is the state’s best chance to develop a new, clean and renewable energy source.

If the PUC approves the power-purchase agreement, Maine Aqua Ventus will face off against projects in New Jersey, Virginia, Texas, Ohio and Oregon for the federal money. Only three projects will be selected.

Tux Turkel can be contacted at 791-6462 or at:

tturkel@pressherald.com

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