October 15, 2013

Statoil leaving Maine for more certain climate

The company, which planned to build a $120 million wind farm, blames its decision on a LePage initiative to reopen bids for offshore wind projects.

By Tux Turkel tturkel@pressherald.com
Staff Writer

The Norwegian energy company that planned to build a $120 million wind farm off Maine’s coast has pulled the plug on the project, citing a controversial political maneuver in Maine.

click image to enlarge

Statoil had planned to erect four floating wind turbines – similar to these producing power in the North Sea – off Boothbay Harbor.

Trude Refsahl/Statoil

A spokesman for Statoil said Tuesday that a vote in the final days of this year’s legislative session to reopen bids for offshore wind projects, an initiative prompted by Gov. Paul LePage, was a “key factor” in the company’s decision to leave Maine.

Now, Statoil will focus its research and development efforts on a similar project in Scotland, where the government’s policy is more clear, Ola Morten Aanestad told the Portland Press Herald.

“The change (in Maine law) was definitely something that creates a lot of uncertainty from our point of view,” he said. “What could happen if we went ahead, and there were new changes in the future?”

In a news release, Statoil cited “changes in the framework conditions in the state, uncertainty around the commercial framework and schedule implications of project delays.” In total, those factors made the project’s outlook too uncertain to proceed, the company said.

In an interview, Anaestad said there were “no technical show stoppers” with the wind resources in Statoil’s project test area off Boothbay Harbor. The overriding factor was the “political uncertainty” created by Maine’s mixed signals, he said.


Early this year, Statoil won a power purchase contract from the Maine Public Utilities Commission, but LePage criticized the contract’s above-market rate for the electricity.

In exchange for not vetoing a sweeping energy bill at the end of the legislative session, LePage set in motion a process that led to the PUC seeking additional bids.

That cleared the way for an application from a business partnership led by the University of Maine and its offshore wind project, called Maine Aqua Ventus. The partners launched a one-eighth-scale version of their technology last summer off Castine.

Statoil put its work on hold soon after the Legislature voted, and hinted at the time that it might leave the state because of the change.

Statoil’s departure leaves Maine with only one prospect for developing a deepwater, offshore wind industry.

The Maine Aqua Ventus proposal now is being reviewed by the PUC. The commission is set to decide by year’s end if the project has the financial and technical capacity to get a power purchase agreement, a critical step in winning a $46 million federal energy grant next year.


Statoil’s decision to leave was welcomed by LePage, who had been critical of the above-market power contract’s impact on ratepayers, pegged at $200 million over 20 years. He also said Statoil was “ambiguous” in its commitment to expanding Maine’s economy.

In a prepared statement, Le- Page said, “Through bipartisan legislation, the governor and the Legislature worked to ensure that additional competition could be considered prior to embarking on a 20-year plan for Maine’s offshore wind industry and to finalize the best contract for Maine by the end of the year. With electric rates the 12th-highest in the country we must continue to attract lower-cost electricity that will grow Maine jobs.”

LePage didn’t mention that the power costs from Maine Aqua Ventus remain unknown, if the project wins PUC approval. The information remains confidential, and isn’t likely to be revealed when the PUC makes public an edited version of the project’s application later this month.

Following Statoil’s announcement, Maine Aqua Ventus noted that the university initially worked as a partner with Statoil, and only recently was in competition.

“Throughout our work on our project,” the partnership said in a statement, “we have been focused on building the best possible project for Maine, not on the maneuvering of other interests in the process. Whatever Statoil’s reasons for leaving Maine, we will continue to move forward with our mission of developing the state’s offshore wind potential.”

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