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Update: Maine's Offshore Wind Development Now A Bidding War... Of One

What had suddenly become a two-horse race to tap into the vast potential for offshore wind energy in Maine as an early leader in developing this industry in the U.S. has taken another turn, with Statoil pulling the plug on its proposed offshore wind energy project due to what it deems unfair manipulation by state officials.

Maine has one of the more robust offshore wind energy profiles, and is one of the first states to try and tap into it. In 2010 Statoil landed a power-purchase agreement (PPA) with Central Maine Power Company (20 years at $0.27/kWh) for its proposed $120 million 12-MW Hywind project, and earlier this year it received preliminary approval from the Maine Public Utilities Commission. But Maine state officials, concerned about that rate being too high and seeking to maximize local economic benefits from offshore wind development, reopened the bidding process this summer to allow a University of Maine-developed project to submit a competing proposal for its now-being-demonstrated VolturnUS technology. That annoyed Statoil to the point where it put its Maine plans on hold. Subsequent revelations that state officials had aggressively worked behind the scenes months earlier to torpedo the Statoil-CMP agreement only fanned the flames.

The UMaine-backed proposal for its own 12-MW pilot project was filed with the PUC on August 30 by newly formed Maine Aqua Ventus I, GP LLC, a partnership of Cianbro Emera and Maine Prime Technologies (a UMaine spinoff). That plan was kept entirely confidential, preventing public analysis and comparison, though the state PUC has since ruled that some of the information must be made public and all of it made available to Statoil.

Nevertheless, Statoil is fed up with the whole process, so it's pulling the plug: "we have decided to discontinue this project," confirmed Ola Morten Aanestad, communications VP for North America. The company will focus on a similar Hywind project in Scotland where support for offshore wind seems more stable, but It also will continue to explore other U.S. offshore wind opportunities (including potentially revisiting Maine) in locations meeting criteria of wind resources, deep water, and close to load centers. No formal plans are in place, but "we are watching the market closely, and believe it can be an interesting market for us longer term," he said.

State officials are shedding no tears, calling the company "ambiguous in its commitment to growing Maine's economy" while "placing a $200 million burden on Mainers by way of increasing electric costs." Other legislators and industry watchers worry about the impact on a promising fledgling industry, pointing out it's just more of the same stiff-arm from Governor LePage, known as no friend to local wind energy, having once called it "a fraud." (To be fair, that's hardly the worst thing he's said or done during his term.)

A decision from the Maine PUC on at least the UMaine proposal is expected by the end of the year.

Read more wind energy news here.

Lead image: Maine State Flag blowing in blue sky, via Shutterstock

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