Changing Energy Market Behind Delay of Contract for Maine’s 12-MW Floating Offshore Wind Project

Citing changes in the energy market, utility regulators in Maine have delayed a decision for a power contract that would allow development to move forward on a 12-MW floating wind farm in Maine waters.

In a meeting yesterday of the Maine Public Utilities Commission (PUC), chairman Mark Vannoy said that the PUC would like time to reconsider the terms that form a proposed power contract between Maine Acqua Ventus and Central Maine Power Co. The Acqua Ventus offshore wind project is being led by the University of Maine.

The proposed contract is based on a term sheet that the PUC approved in 2014.

According to a public recording of the PUC meeting, Vannoy said that, since significant time has elapsed since the term sheet was agreed upon and market conditions continue to change, the PUC will defer action on the contract, instead developing a draft order for comment to reconsider the terms.

Acqua Ventus was unavailable to comment on the PUC’s decision.

In the proceedings, Vannoy noted that, with respect to the term sheet, he was specifically interested in changes in the energy market that relate to the preamble of Maine’s Ocean Energy Act, which became law in 2010.

He said that the preamble highlights oil prices at the time of passage of $147 per barrel and heating oil at $4 per gallon — with those prices potentially continuing into the future.

However, Vannoy noted that the U.S. Energy Information Administration expects that Brent crude oil will average $57 per barrel in 2018, or a third of what the preamble to the legislation envisioned for the future.

The preamble, he said, also envisioned offshore energy would help meet Maine’s renewable portfolio standard (RPS), but the state is currently meeting its RPS without offshore wind, while onshore wind in Maine provides three-fifths of utility-scale wind power in the six New England states.

Vannoy expressed concern in the meeting about the energy prices that would result from the power contract, if it were approved under the initial term sheet. He said that the PUC recently directed Maine’s utilities to enter a long-term contract for up to 75 MW of solar at 3.4 cents per kWh.

Power from the Acqua Ventus project under the proposed contract would have a base price of 23 cents per kWh, with an escalator that would drive the price up to 35.1 cents per kWh in the 2040 time frame.

“Our current forecast puts energy prices in the neighborhood of 7 cents [per kWh] in 2040,” Vannoy said, adding that “forecasts are 50 to 85 percent lower than those used to approve the terms in the term sheet.”

The project under the existing terms would require subsidy, he noted, adding that the intent of the statute is to develop offshore wind technology without subsidy.

Lead image credit: CC0 Creative Commons | Pixabay

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