Economic development in offshore power touted at closing day of conference

Posted June 16, 2011, at 10:17 p.m.

PORTLAND, Maine — Gov. Paul LePage’s energy czar on Thursday said the administration sees economic development potential from the development of offshore energy.

In recent weeks, there have been various media reports on exactly where LePage’s administration stood on the development of offshore wind, in particular. At the closing day of the EnergyOcean International 2011 conference, Kenneth Fletcher, director of the governor’s Office of Energy Independence and Security, spoke to clarify the administration’s stance.

“I think the real opportunity we see, the administration sees, is through our research and development, manufacturing and assembly — we would like to have Maine become the pre-emptive leader, at least on the East Coast,” said Fletcher. “Our primary objective at this point is to develop the right expectations. We understand this will require resources, commitment and us working together in a private-public partnership. The administration wants to make sure it is there at the right time with the right information and the right commitment.”

The next step, said Fletcher, was for administration officials to have comprehensive talks with researchers and developers working on Maine’s nascent offshore wind sector to fully understand the opportunities and challenges.

Development of alternative power shouldn’t come at a cost to ratepayers, Fletcher said, and experts in the field must look at new ways of funding such power. For example, if merchant lines export energy produced in Maine, “tolls” on that energy could be used to offset investment in development.

Development of alternative sources of electricity should be viewed as a replacement for oil, Fletcher said. Both supply and costs of oil can be unpredictable, and when they jump, they hurt Mainers both at the gas pumps and in the cost of heating oil. Maine is the most dependent state on heating oil.

“Maine is vulnerable — the governor is going to do what he can to change that position, but it’s going to take time,” said Fletcher.

Habib Dagher, a University of Maine professor and leader in the DeepCwind Consortium, which is developing the offshore wind sector, said that when gas hits $4 a gallon in Maine, it means $5 billion a year leaves the state. The annual state budget is $3 billion, he noted.

Dagher also said that many have questioned the validity of the alternative energy industry. In response, he pointed to a recent Bloomberg report that $243 billion was spent last year in the renewables sector.

“Is that a business? Sure it is. The question is, how do we get into it,” said Dagher.

Maine can develop wind farms 20 miles off the coast to produce green power for the East Coast, where more than 55 million people live, he said. Like the export of potatoes, wood products, paper and lobsters, Maine can export power and prosper from the trade, he suggested.

The goal is to bring the cost of offshore wind power to 10 cents per kilowatt hour by 2020, at the grid. That’s the production cost of energy. Currently, power in the state is at roughly 16 cents per kilowatt hour, and half of that is transmission costs, he said.

“It’s not easy, we don’t have all the answers of how we’re going to get there, but we’re working very hard to get there,” said Dagher.

John Ferland, vice president of project development at Ocean Renewable Power Co. LLC, talked about his company’s tidal power technology, which recently finished beta testing in Cobscook Bay.

“The best thing about tidal energy is it’s happening right now,” said Ferland.

Over the past four years, as ORPC was developing the technology and support equipment, the project has spent more than $8 million into the Maine economy, creating or retaining more than 100 jobs, Ferland said.

“This is good for Washington County and Lubec, but it’s also good for Bangor, Portland, Brunswick — this is having a statewide impact,” said Ferland. “Our supply chain reaches 13 of Maine’s 16 counties.”

Cianbro Chairman and CEO Peter Vigue said it was reasonable to think of Maine as New England’s future renewable power provider. The state has the people and companies to make it happen, the proximity to the market and the natural resources, he stressed.

“One hundred fifty years ago, this state was the lumber capital of the world. The largest paper company in the world was founded here in Maine — International Paper — their first little mill was in the adjacent community to Jay,” said Vigue. “When we think about it, our economy for many, many years has been a natural resource-based economy.”

In addition to producing and selling renewable energy, the state can become a leader in making the technology for the industry, Vigue said.

As the scale of turbines increases over the next decade, new materials and technology will be needed for blades, superstructure and other parts, he said. They can be developed and tested at UMaine labs, he suggested.

Maine’s expertise in manufacturing, advanced materials and other areas can attract companies here to make equipment for the wind sector, he said. General Electric currently makes all of its steam and gas turbine blades in Bangor, he said — the idea of Maine as a manufacturing hub isn’t so remote.

“We can seize the moment if we act,” said Vigue.

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