Tildy Bayar, Associate Editor, Renewable Energy World
July 05, 2013 | 4 Comments
LONDON -- Norwegian energy company Statoil has announced that it will put its 12 MW, US $120 million Hywind Maine floating offshore wind project, planned for construction off the coast of Maine in the U.S., on indefinite hold.
The decision comes in response to an amendment, LD 1472, approved in late June by the Maine state legislature, which re-opens bidding for the project to the University of Maine. In January the state’s Public Utilities Commission (PUC) approved the terms of a contract with Statoil for the project and directed the Central Maine Power Company to enter into a 20-year, $270/MWh power purchase agreement (PPA) for the electricity from the wind park. Final approval of the PPA was expected this summer.
In a letter to the PUC, Statoil vice president Lars Johannes Nordli said that, based on the contract, his company had “actively pursued” development of the project and had “invested significant time and financial resources” on pre-construction work. The company is now considering alternative locations for the project, Nordli said, and “cannot continue to spend its resources on this project without certainty that a contract for the project output will be finalised.”
“Given the risk and uncertainty created by LD 1472, Statoil is therefore preparing to put the Hywind Maine Project on hold, while we continue to assess the changes made to the law, the total risk picture and progress plan going forward,” Nordli said.
The amendment appears to be the result of a decision by the office of Maine’s governor, Paul LePage, who is on record as opposing wind power. In an op-ed, local newspaper the Kennebec Journal said LePage has “even claimed that wind power is a fraud, saying that the University of Maine at Presque Isle's windmill is turned by ‘a little electric motor’ and not wind, a statement that even he later admitted was laughably false.”
The governor’s office has said the University of Maine should have the option to compete for a project that will benefit the state. And the Maine Public Broadcasting Network reports that Patrick Woodcock, director of the state’s energy office, said about the Statoil contract: “We really should be getting a maximum return on an investment of up to US $200 million the ratepayers would be subsidising. Frankly, when you look at Statoil's term sheet, it did not deliver on a basic requirement of establishing an industrial base to manufacture and develop offshore wind.”
The University of Maine does not have the resources to develop the project on its own, according to Maine’s Senate majority leader Seth Goodall.
In his letter, Nordli said: “We will keep the option open to re-initiate project activity if a PPA can be concluded according to the term sheet, and the total risk picture in Maine is acceptable.” Statoil says it is considering several other locations for the project, including a site off Scotland’s northeast coast.
Lead image: Hywind on location, courtesy Trude Refsahl/Statoil
Video: Hywind installation off the Norwegian coast, courtesy Statoil