January 25, 2013

Pioneering Maine wind project passes 'biggest hurdle'

The utilities agency OKs contract terms for a $120 million floating turbine test off Maine, but one member laments the risk to ratepayers.

By Tux Turkel tturkel@pressherald.com
Staff Writer

HALLOWELL — Maine's Public Utilities Commission has approved the terms of a project proposal by a Norwegian energy giant that could make Maine a global leader in research and development of offshore wind power.

click image to enlarge

The four floating wind turbines Norwegian energy company Statoil wants to site 12 miles off Boothbay Harbor would look similar to the Hywind test turbine, now producing power off the coast of Norway.

Photo provided by Trude Refsahl / Statoil

The PUC's 2-1 vote Thursday to support the Statoil Hywind Maine demonstration project means customers will pay slightly higher electricity bills in the near term.

But the commission decided that the cost – about 75 cents a month for the average residential customer – is worth the opportunity to put Maine on the international wind power map.

The decision doesn't guarantee that Statoil will build the project. The contract gives the company room to change course if, for instance, it doesn't win the second installment of a large federal grant or Congress does not renew a key tax credit for renewable energy.

The company's project manager said after the vote that Statoil will review details of the approval, and is "very grateful" that the PUC largely accepted the contract terms.

"This was the biggest hurdle," said Kristin Aamodt, the project manager.

The $120 million project would put four, three-megawatt wind turbines on floating spar-buoy structures tethered to the seabed in 460 feet of water off Boothbay Harbor.

They would be assembled onshore and towed to the site 12 miles out to sea. Power could be flowing into the grid, via undersea cable, by 2016.

The hope is that the pilot project could lead to a commercial-scale, offshore wind park in Maine. Beyond that, advocates envision a local industry and research community to help develop, build and supply an emerging energy sector along the East Coast.

A deep-water wind-power industry, they say, someday could create thousands of jobs and billions of dollars in investment.

That vision guided the thinking of the two commissioners who voted in favor of the project Thursday, Tom Welch, the chairman, and David Littell.

During deliberations, both acknowledged that Central Maine Power Co. customers would pay higher rates in the short term to subsidize the research and development of Statoil's project. But that risk, they said, is tempered by the chances of Maine becoming a "center of excellence" that would create jobs and attract talented young people to an aging state.

Littell likened the potential to the tech industry around Route 128 in Greater Boston or Silicon Valley in California.

Welch and Littell noted that Maine's Ocean Energy Act of 2010, which has opened the door to offshore wind and tidal power development in the state, assumes an element of risk to ratepayers.

That risk was too great for Mark Vannoy, the PUC's newest commissioner and a recent appointee of Gov. Paul LePage. The governor has consistently opposed projects and policies that add to electricity costs, and Vannoy echoed those concerns.

He said he couldn't support the deal without guarantees that Maine would reap economic benefits greater than the burden on customers.

"I don't think this pilot project achieves the goals of the statute," he said, referring to the Ocean Energy Act.

Statoil is a large oil and gas producer that's using its experience in the North Sea to develop renewable-energy projects around the world. It launched the world's first floating turbine three years ago, off Norway.

Wind turbines are common in shallow water off Europe. Now, developers are testing technologies to locate them miles offshore, where the winds are better and coastal residents can't see them. Statoil's project could become the first floating wind turbine park in the United States.

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