September 8, 2013

Wind power proposal clarifies energy costs

BY TUX TURKEL

The proposal will shed light on what consumers can expect to pay for renewable wind energy generated off the coast of Maine -- at least in its developmental stages. The price of wind probably will be well above the price of energy from burning fossil fuels or hydroelectric dams, especially while the technology of offshore, deepwater wind is still being tested.

Initial assessments will be difficult, however, because UMaine has chosen to keep the entire, 100-page document from public view.

So at least for the time being, the public is unable to learn what customers would pay for the electricity or get a sense of the overall economic potential of a venture meant to advance Maine's standing as a center of research and construction in deep-water ocean energy.

UMaine's proposal, like a competing bid submitted last winter by Statoil, a Norwegian energy company that also wants to build an offshore wind project, probably will offer power at costs considerably greater than what consumers pay now for electricity.

The prices will quantify the higher costs of offshore wind energy, at least in its developmental stages

The lack of information also makes it impossible for now to compare UMaine's plan with the Hywind Maine project approved last winter by the Maine Public Utilities Commission. Hywind Maine was proposed by the Norwegian energy company Statoil, and involves a $120 million floating wind turbine project off Boothbay Harbor.

The 12-megawatt Hywind Maine wind park would generate enough energy annually to power roughly 8,000 homes, through a power purchase agreement for 27 cents per kilowatt hour. That's well above market rates, but the terms also called for Statoil to provide certain economic benefits, tied to job creation and in-state investment.

That didn't satisfy Gov. Paul LePage, a vocal opponent of wind power. He argued that the rate was too high and the economic benefits were too low. In exchange for allowing a sweeping energy bill to become law this summer, LePage engineered a political maneuver in the waning days of the Maine Legislature. The result was that lawmakers voted to order the PUC to reopen the bid process for offshore wind proposals.

That created a two-month window for UMaine to submit a bid for a project it's developing, called VolturnUS. The university and its partners submitted the bid last Friday, the deadline for the application.

PUC to review case

In a statement released Tuesday, the university said its proposal is based on a full-scale pilot farm that meets the requirements of the PUC request and on a smaller prototype it is testing off Castine.

"UMaine believes this is a strong proposal from the newly formed Maine-based company Aqua Ventus I, GP LLC -- a company formed by Cianbro, Emera and Maine Prime Technologies LLC -- to commercialize UMaine's floating wind turbine technology," the university said.

The PUC said on Tuesday that the three-member commission will deliberate the case and make a decision by Dec. 31. No date has been set for deliberations.

LePage's maneuver also prompted Statoil to announce in early July that it was putting Hywind Maine on hold, citing the uncertainty created by the new bidding process. The company said it would re-evaluate the project this fall.

However, it's unclear when Statoil, or the public, will have more details about what UMaine is proposing. Elizabeth Swain, a consultant in Maine for Statoil, said Tuesday she could not reach company officials in Norway immediately for comment on UMaine's filing.

In reopening the bid proposal, the PUC set out six broad requirements, beyond electric rates. They include that the bidder has the technical and financial capacity to build and operate the project; that it has experience in the deep-water offshore wind industry; that it will invest in manufacturing facilities in Maine and that it can quantify the economic benefits of the project, such as buying goods from local suppliers.

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