Effort to build offshore wind industry in Maine may hinge on 73 cents
A decadelong effort to establish an offshore wind energy industry in Maine is at a turning point, its future hinging on whether state utility regulators vote to reopen a power contract to test a patented technology for deep-water floating wind farms. Supporters of the University of Maine-led Maine Aqua Ventus project fear that a vote by the Public Utilities Commission to alter the power-rate terms could doom the venture, just as it reaches critical stages for financing and permits.
From article, (A decadelong effort to establish an offshore wind energy industry in Maine is at a turning point, its future hinging on whether state utility regulators vote to reopen a power contract to test a patented technology for deep-water floating wind farms.
Supporters of the University of Maine-led Maine Aqua Ventus project fear that a vote by the Public Utilities Commission to alter the power-rate terms could doom the venture, just as it reaches critical stages for financing and permits. The project involves two floating wind turbines that the university and its partners are preparing to test off Monhegan Island.
Nearly five years ago, the Norwegian energy company Statoil withdrew plans for a $120 million demonstration floating wind farm off the Maine coast. Statoil had won a bid for proposals and had negotiated power-rate terms with the PUC. But it left Maine after LePage held hostage a sweeping energy bill in the Legislature and threatened a veto if the PUC didn’t reopen the bidding process. LePage has been a consistent and vocal critic of above-market electric rates for renewable energy projects, and his political maneuver allowed Maine Aqua Ventus to submit a competing application.
Statoil objected to Maine changing the rules in mid-game. A spokesman told the Press Herald at the time: “The change (in Maine law) was definitely something that creates a lot of uncertainty from our point of view. What could happen if we went ahead, and there were new changes in the future?”
In 2015, Statoil announced it would build a larger, $250 million test project in Scotland. Now considered the world’s first commercial-sized floating wind farm, Hywind Scotland began producing power late last year and its output has greatly exceeded expectations.
If the [University of Maine-led Maine Aqua Ventus] project stays on schedule, it likely will be the first full-scale floating wind project in North America. Testing the platform technology is considered key to deploying cost-effective wind farms in deep waters off the East Coast. The 2014 power contract, which would increase consumer electric bills by less than a dollar per month, also is crucial because both public and private investment is tied to it.
The immediate risk, advocates say, is $87 million in federal funding, thousands of hours of research and development and Maine’s reputation as a place to make renewable energy investments.
Longer term, the economic promise of manufacturing floating platforms for the nascent East Coast wind industry, as well as pioneering a new power source that could help electrify Maine and New England at competitive power rates, may be at stake.
Those potential benefits are being brushed aside by Gov. Paul LePage and other critics of the project. In comments supporting reconsideration of the contract terms, LePage’s energy director, Steven McGrath, focuses exclusively on the cost of power from the demonstration project.
He noted that it would be well above current market prices, adding between $172 million and $187 million to Central Maine Power customer electric bills over the 20-year contract period.
For an average CMP home customer, that works out to roughly 73 cents a month in the first year of the project.
This premium had been approved four years ago by the PUC. But at a meeting in January to vote on approving the long-term contract, the terms came under new scrutiny. The three commissioners – each appointed by LePage – voiced concerns that changing economic factors, including lower prices for natural gas and oil prices, warranted another look at the above-market rate.
"We were blindsided by the commission’s deliberations in January,” said Jeff Thaler, UMaine’s associate counsel. It has always been clear, Thaler said, that power from a one-off, 12-megawatt demonstration project would cost way more than electricity from conventional power plants rated at hundreds of megawatts. It’s like comparing the cost of building one custom truck to mass-producing thousands of pickups at an assembly plant.
That theme is highlighted by new projections from a Department of Energy research lab. The contract power rate for the 12-megawatt, two-turbine demonstration project starts at 23 cents per kilowatt-hour in its first year.
The federal energy lab estimates that the rate could fall to 7.7 cents by 2030, at a 100-turbine, 1,000-megawatt floating wind farm. Full-scale mass production would make offshore wind competitive on the grid, Maine Aqua Ventus says, on par with bringing Canadian hydropower into New England over a proposed new transmission line.)
For More Info
No comments:
Post a Comment