Statoil wind project on hold
In response to a new Maine law that would reopen the contract bidding process that Statoil thought it had successfully concluded last January, Statoil Vice President Johannes Nordli informed the Maine Public Utilities Commission (PUC) it was putting its proposed $120 million offshore wind pilot park proposal on hold.
“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 wrote in a July 3 letter to the PUC.
The PUC approved Statoil’s contract term sheet in January, which specified the rate that Central Maine Power would pay for electricity generated at Hywind Maine and included both short and long-term commitments by Statoil to Maine.
LD 1472 requires the PUC to conduct a second competitive solicitation of proposals and prohibits the PUC from awarding a contract until it completes a review of any additional bids submitted by September 1, 2013.
In his letter, Nordli wrote that Statoil expected final approval of its contract with Maine by the end of this summer and under the new law “the future of any contract for the Hywind Maine Project is in doubt.”
Gov. LePage has been a vocal critic of the costs associated with offshore wind power development. LePage opposed the Statoil PUC decision at the time, saying the electricity rate CMP would pay under the contract terms was too high.
In a press release regarding LD 1472, on June 28, Gov. LePage characterized the amendment as an opportunity for the University of Maine, which is developing its own offshore wind project in state waters.
Both Statoil and University of Maine wind projects were awarded $4 million Department of Energy grants in December 2012 and are in the running for up to $47 million more in federal energy dollars.
“Prior to moving forward with a $200 million contract I would prefer to consider the economic opportunity to our own university system, right here in Maine,” Governor LePage said.
Statoil had not yet committed to its Maine Hywind proposal and Nordli indicates this latest development may persuade them to look elsewhere.
“Statoil is considering several locations for building a pilot park based on the Hywind floating concept, in addition to Maine, and cannot continue to spend its resources on this project without certainty that a contract for the project output will be finalized,” Nordli wrote.
Sue Mello can be reached at 207-644-4629 or email@example.com.