The recent news that Statoil North America has decided to put its plans for a floating offshore wind project in Maine on hold is disturbing at many levels. The message Maine has just sent to the business community here and abroad is that we do not honor our commitments and therefore people cannot count on Maine as a place in which to make long-term investments.
Here’s how we got to this point. Three years ago, Statoil responded to a request for proposals sent out by the Maine Public Utilities Commission to bid on a pilot deep water offshore wind project off the Maine coast. After some negotiating to sweeten the deal for Maine, Statoil in January was awarded initial approval for the $120 million project, which would have been the first of its kind in the U.S.
Gov. Paul LePage, who has never expressed appreciation for renewable energy, required that his support for a newly minted Maine energy bill be contingent on a last-minute provision that allowed for the PUC proposal process to be reopened so the University of Maine could submit a bid of its own.
This is the same opportunity that the university had three years ago and passed on — and that Statoil applied for and spent considerable effort and money to win.
What is Maine thinking? It seems that state Energy Director Patrick Woodcock expected this reaction from Statoil, and that certainly throws into question the politics behind this attempt to seemingly scuttle an already agreed-on business deal. How does LePage possibly balance this with his supposed pro-business agenda?
Politics aside, for me, the most troubling aspect of the state’s reversal is the fact that many in Maine view the University of Maine as a capable body to lead a new industry into the future. No one would argue against any university playing a key role by pushing the research and producing gifted students to work in whatever field is being developed. But few would suggest that any university should lead an industry in anything. To put in charge a place of higher learning, which does not operate under the same realities as a business, is simply foolish.
For two years I represented a company in Maine that had developed one of the three families of prototypes for floating offshore wind platforms. That company, Seattle-based Principle Power, was the only U.S.-based platform technology represented in the university-led DeepCwind consortium. DeepCwind was charged with developing a deep water test turbine in Maine, but through a series of miscues and bad management the consortium never functioned as a workable group, and the university took over the process completely — with no transparency and little proper accountability. In the end, much delayed, the university launched a one-eighth-scale model wind turbine this spring into a world that had already passed it by.
In the meantime, Statoil has continued to spin power into the grid from its Hywind project off the coast of Norway, which was the first at-scale floating wind project in the world back in 2010. The turbine it placed in the ocean three years ago is more than 100 times larger than this latest university demonstration turbine. Principle Power turned its back on Maine in late 2010, believing that the process led by the university was not conducive to healthy business. Principle Power went on to form a joint venture project in Portugal where it has launched the second at-scale floating wind turbine off the coast of that country.
That two-megawatt turbine has been performing at exceptional levels, and the company has begun planning a phase two project to expand the number of turbines at that location. These two companies, which are among the world leaders in this new technology, have been impacted by the flawed roles that Maine has assigned to the university in this emerging industry. It is not insignificant that the university, once the suitor of Statoil, at the expense of all others, is now a finalist in direct competition for a $47 million award from the U.S. Department of Energy. Principle Power is also in that competition but for a project based now on the west coast.
The word that Maine reversed itself on an agreed-on deal with a major energy company will reverberate around this industry. We cannot expect there to be any interest from companies in investing money to develop offshore wind here in Maine in this kind of climate. The governor’s fingerprints appear to be on this reversal, but he is hopefully a temporary obstruction.
Of greater concern is the way in which Maine views the role of its leading university. The University of Maine has a key role in developing some of Maine’s world-class wind resources just off our shore. However, it is critical that there be a clear understanding that the university’s role is not that of kingmaker or industry leader but of research and personnel development hub. If we don’t clarify this distortion soon, we will not have an offshore wind industry here in Maine.
Des FitzGerald of Camden is the founder and former CEO of Ducktrap River of Maine, a smoked seafood company based in Belfast. He is the former vice president of development for Maine for Principle Power.