Offshore wind pilot project advances, decision eyed in 2014 

AUGUSTA, Maine – An international energy development firm announced Monday that it’s moving ahead with plans for an offshore wind energy pilot project in the Gulf of Maine, with a goal of making a final decision on the project next year.

As a test site for more extensive development of offshore wind energy production, Statoil North America proposes to moor four floating turbines in federal waters off the coast of Maine to generate 12 megawatts of energy. The Maine Public Utilities Commission voted 2-1 in January to accept Statoil’s revised terms to sell electricity generated by the project, called Hywind Maine, to Central Maine Power Co. The next phase of project planning includes environmental impact studies and conversations about potential impacts with Maine’s fishing community.

“We are aiming at a final investment decision in late 2014,” Kristin Aamodt, Statoil’s project manager for Hywind Maine, said in a phone interview on Monday.

Securing state permits and a federal lease to moor turbines in federal waters off Boothbay Harbor represent the next key regulatory challenges. Statoil also continues to evaluate the project’s financial viability, although a $4 million U.S. Department of Energy grant award in December and the potential for more federal grants helps on that front, Aamodt said.

If Statoil decides in 2014 to move ahead with Hywind Maine, the target date for installation of floating turbines would be 2016, Aamodt said. Results of the Hywind Maine floating turbine testing then would allow Statoil to make a decision on development of a large-scale commercial offshore wind energy farm using that type of technology within five years, she said.

“I think if you see a pilot park in 2016, we would aim at having a large park in the water within five years of that,” Aamodt said. “It depends on having a business case for the large park. We are quite confident in the technology. It’s a matter of making the income match the cost.”

As part of revisions made to an August 2012 term sheet that drew opposition from Gov. Paul LePage’s administration and raised concerns for Public Utilities Commission’s Chairman Thomas Welch, Statoil lowered the pilot project’s energy cost from $290/Mhw to $270/Mhw, which opponents criticized as still being well above current market prices.

“What’s important to highlight is that the cost of a pilot project is much higher than the cost of a mature technology,” Aamodt said Monday. “This is a stepping stone to a future large park. We are looking at a target of 10 to 15 cents per kilowatt-hour for the large park.”

The revised term sheet, submitted to the PUC on Jan. 14, added a “good faith” commitment to involve Maine contractors in any commercial wind farm Statoil develops along the Atlantic Coast from Maine to Maryland before 2025.

Conversations continue with Maine businesses that could become part of a “supply chain” for floating turbine wind energy generation, Aamodt said Monday. “A significant portion of the supply contract will be with people in Maine,” she said.

Statoil has contracted with Tetra Tech’s Portland office to work on the environmental surveys and with Barton Gingold to handle communications related to Hywind Maine. Statoil also continues to work with the University of Maine to test materials and hone floating turbine technology, which has not been tried in U.S. waters.

A fisherman from the Boothbay region will facilitate conversations between Statoil representatives and local fishermen, Aamodt said. A format for those discussions has yet to be determined, she said.

Aamodt cited the PUC’s approval of the revised term sheet and Hywind Maine’s receipt of the U.S. Department of Energy grant as important recent developments that pushed the project forward. In light of LePage’s characterization of the PUC’s decision to accept the term sheet as an “irresponsible” act that will raise costs for Maine electricity ratepayers, support from Maine businesses and residents also buoyed Statoil’s decision to move ahead with Hywind Maine, according to Aamodt.

“This is a project that a lot of Maine citizens want to see, recognizing that [offshore wind energy] can be an industry that Maine can benefit from in the future,” she said. “We are happy that so many Maine citizens share that view with us.”

Statoil is working on similar floating turbine offshore wind energy projects in Europe and Asia, but Aamodt said those projects aren’t competing directly with Hywind Maine.

“As an energy producer, we see that floating offshore wind is a promising technology for generating energy on a large scale,” she said. “We may end up doing several projects if it makes good business sense.”