Ken Fletcher, director of the Office of Energy Independence and Security, did his job in protecting the public’s interests when he expressed concerns about Statoil North America’s proposal to test floating turbine wind energy technology off the coast of Maine. However, it’s important to recognize that the economic projections Fletcher found troublesome relate specifically to a research and development project, not to offshore wind energy generation as an industry.
In comments filed Sept. 7 to the Maine Public Utilities Commission, Fletcher questioned whether Statoil’s Hywind Maine pilot project’s anticipated economic benefits would justify what he believes could be as much as $10 million per year for 20 years in added costs to ratepayers for electricity generated by four floating wind turbines placed in the Gulf of Maine.
In seeking to address Fletcher’s concerns, the PUC must look beyond the narrow parameters of the pilot project model and view Statoil’s proposal within the context of the potential that floating offshore wind energy offers Maine. The project’s cost must be viewed as an investment in innovation — one that has already attracted more than $30 million in private funding, according to Dr. Habib Dagher of the University of Maine’s Advanced Structures and Composites Center, which is working on prototype floating turbines.
Successful development of floating turbine offshore wind technology, such as that proposed for Hywind Maine, would provide a local, low-carbon energy alternative to foreign fossil fuels. A fair assessment of the project’s overall value must account for reductions in costs associated with pollution caused by reliance on fossil fuel and price volatility related to the political vagaries of the global oil and gas markets.
The Hywind Maine proposal is a research project, and research inherently involves risk. A fair evaluation of the risk associated with this endeavor must look beyond a simple comparison of income generated from jobs created by the pilot project versus cost to ratepayers. The long-term benefits of commercializing floating turbine wind energy generation also should factor into the PUC’s consideration of the Statoil proposal.
“Statoil’s rationale for planning a Hywind Maine Project with a low rate of return is solely the role this pilot park will have as a door opener to future commercial scale offshore wind parks worldwide,” Lars Johannes Nordli, vice president of wind business development for Statoil ASA, wrote in documents made public Sept. 17 on the PUC website. “Statoil sees the potential for commercial scale floating wind parks as significant in the Northeast U.S., and specifically in the Gulf of Maine.”
The same documents state that a commercial Gulf of Maine wind farm would generate private investment of “$2 billion to $3 billion, and would most likely be realized in a 2020 timeframe.”
Climatic conditions in the Gulf of Maine and natural geographical conditions along the coast, “which seem to be unrivalled in the New England region,” according to Nordli, make Maine an ideal candidate to become the epicenter for the nascent floating turbine wind energy sector.
If so, Maine businesses — including boat builders, composites manufacturers and contractors — stand to reap significant supply-chain opportunities. That potential warrants involvement from those businesses now, which is reflected in letters of support for Statoil to the PUC from Cianbro, Reed & Reed and other Maine firms.
In a study contracted by Statoil, University of Maine economics professor Todd Gabe predicted that a “500 MW floating offshore wind farm in the Gulf of Maine would generate a statewide economic output of $270 million to $460 million annually during a five-year planning and construction phase and a further $115 million to $145 million annually during a 20-year operational phase,” according to a Sept. 17 correspondence from Statoil to the PUC.
We’re not so naive as to accept Statoil’s optimistic projections on faith. The PUC must do its due diligence on the pilot project.
However, the Hywind Maine project — in tandem with the Ocean Renewable Power Company tidal project in Cobscook Bay — positions Maine at the forefront of developing new, ocean-based energy generation technologies that could be used here and marketed elsewhere in the U.S. and internationally.
Realizing the substantial economic benefits that would derive from making Maine a renewable energy leader won’t happen without some investment in research and development. The fact that Statoil, an international industry leader with the resources and experience to undertake a project of this scale, finds business value in moving ahead with the project, shows it’s an opportunity worth exploring.