Decision looms for Statoil's Hywind pilot off Maine

CEO insists second Scottish project remains possible

The Public Utilities Commission (PUC) of the US state of Maine will make a decision later this week about Statoil’s proposal to negotiate a power purchase agreement (PPA) to fund a 12MW Hywind floating offshore project.

At Thursday’s meeting, commissioners are scheduled to vote on core contract terms set out in a ‘term sheet’ submitted by Statoil on 15 August.

In the term sheet, Statoil states its intention to negotiate a twenty-year PPA with the state’s three investor-owned utilities, Central Maine Power, Bangor Hydro Electric and Maine Public Service Company. The PPA would be set to begin at one of two contract prices: either $290/MWh or $320/MWh. After the first year the price would vary according to an agreed formula.

If commissioners approve the term sheet, they will then instruct PUC staff to negotiate a PPA in line with these terms.

The proposed project’s four 3MW turbines would be located in the Gulf of Maine in water depths of at least 91m (300ft), at least 10 nautical miles from land, with transmission landfall earmarked for the Boothbay area.

Commenting on the term sheet, Maine Energy Office director, Ken Fletcher, expressed concern that the $290/MWh minimum is significantly higher than current energy prices and could mean utility customers paying $203m more than necessary for their electricity over the twenty-year contract period. Fletcher also said that Statoil's proposal foresees the creation of just 30 jobs during the project’s operational phase.

Statoil has refrained from commenting on Fletcher’s criticisms. In its term sheet, the company estimates that project suppliers would employ 150 full-time staff during peak construction. Statoil also commits itself to giving preference to subcontractors employing Maine residents and to make reasonable efforts to spend 40% of both its capital and operation and maintenance (O&M) expenditure in Maine.

The proposed terms also give Statoil the right to terminate the contract in the event that offshore investment tax credit or Department of Energy funding is not extended to cover the full construction period.

* Speaking with Windpower Offshore last week, Statoil chief executive, Helge Lund, denied that progress made in Maine means that Statoil is less likely to move ahead with plans for a Hywind pilot project off Scotland. The company continues to pursue "several opportunities" for developing its Hywind floating platform technology, said Lund.

Lund added: "The Hywind concept works, but it is too expensive. We need to get costs down. I think it is a perfect project for a public-private partnership because it’s a technology at an early stage of development."

Last month, Scotland’s government proposed introducing a higher level of financial support for floating offshore wind projects built off its coastline.

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