Ken Fletcher, director of the Office of Energy Independence and Security, did his job in protecting the public’s interests when he expressed concerns about Statoil North America’s proposal to test floating turbine wind energy technology off the coast of Maine. However, it’s important to recognize that the economic projections Fletcher found troublesome relate specifically to a research and development project, not to offshore wind energy generation as an industry.
In comments filed Sept. 7 to the Maine Public Utilities Commission, Fletcher questioned whether Statoil’s Hywind Maine pilot project’s anticipated economic benefits would justify what he believes could be as much as $10 million per year for 20 years in added costs to ratepayers for electricity generated by four floating wind turbines placed in the Gulf of Maine.
In seeking to address Fletcher’s concerns, the PUC must look beyond the narrow parameters of the pilot project model and view Statoil’s proposal within the context of the potential that floating offshore wind energy offers Maine. The project’s cost must be viewed as an investment in innovation — one that has already attracted more than $30 million in private funding, according to Dr. Habib Dagher of the University of Maine’s Advanced Structures and Composites Center, which is working on prototype floating turbines.
Successful development of floating turbine offshore wind technology, such as that proposed for Hywind Maine, would provide a local, low-carbon energy alternative to foreign fossil fuels. A fair assessment of the project’s overall value must account for reductions in costs associated with pollution caused by reliance on fossil fuel and price volatility related to the political vagaries of the global oil and gas markets.
The Hywind Maine proposal is a research project, and research inherently involves risk. A fair evaluation of the risk associated with this endeavor must look beyond a simple comparison of income generated from jobs created by the pilot project versus cost to ratepayers. The long-term benefits of commercializing floating turbine wind energy generation also should factor into the PUC’s consideration of the Statoil proposal.
“Statoil’s rationale for planning a Hywind Maine Project with a low rate of return is solely the role this pilot park will have as a door opener to future commercial scale offshore wind parks worldwide,” Lars Johannes Nordli, vice president of wind business development for Statoil ASA, wrote in documents made public Sept. 17 on the PUC website. “Statoil sees the potential for commercial scale floating wind parks as significant in the Northeast U.S., and specifically in the Gulf of Maine.”
The same documents state that a commercial Gulf of Maine wind farm would generate private investment of “$2 billion to $3 billion, and would most likely be realized in a 2020 timeframe.”
Climatic conditions in the Gulf of Maine and natural geographical conditions along the coast, “which seem to be unrivalled in the New England region,” according to Nordli, make Maine an ideal candidate to become the epicenter for the nascent floating turbine wind energy sector.
If so, Maine businesses — including boat builders, composites manufacturers and contractors — stand to reap significant supply-chain opportunities. That potential warrants involvement from those businesses now, which is reflected in letters of support for Statoil to the PUC from Cianbro, Reed & Reed and other Maine firms.
In a study contracted by Statoil, University of Maine economics professor Todd Gabe predicted that a “500 MW floating offshore wind farm in the Gulf of Maine would generate a statewide economic output of $270 million to $460 million annually during a five-year planning and construction phase and a further $115 million to $145 million annually during a 20-year operational phase,” according to a Sept. 17 correspondence from Statoil to the PUC.
We’re not so naive as to accept Statoil’s optimistic projections on faith. The PUC must do its due diligence on the pilot project.
However, the Hywind Maine project — in tandem with the Ocean Renewable Power Company tidal project in Cobscook Bay — positions Maine at the forefront of developing new, ocean-based energy generation technologies that could be used here and marketed elsewhere in the U.S. and internationally.
Realizing the substantial economic benefits that would derive from making Maine a renewable energy leader won’t happen without some investment in research and development. The fact that Statoil, an international industry leader with the resources and experience to undertake a project of this scale, finds business value in moving ahead with the project, shows it’s an opportunity worth exploring.
This is a winner for the state of Maine and the nation. Renewable energy is the future. To stand aside and let others make the commitment would be be a lost opportunity.
Ken Fletcher is opposed to renewable energy. He voted against a feed in tariff law in 2009 and delivered a message to the Standing Committee on Energy and Utilities in 2011 promising a veto if a feed in tariff law was passed.
Mike . . . . we already lead the nation on renewables. +50%!!!! Wind is really NOT a renewable. We have not taken a back seat to anyone!!!
“Wind is really not a renewable”.
Dumbest comment evah.
Yessah
Educate yourself Jim, ignorance is not pretty.
Renewable energy is energy which comes from natural resources such as sunlight, wind, rain, tides, and geothermal heat, which are renewable .
http://en.wikipedia.org/wiki/Renewable_energy
Actually, if you look up maine’s energy portfolio, Maine currently gets 34% of it’s energy from renewable resources.
Wind energy is just one aspect of the various types of alternative energy that can propel Maine towards a brighter economic future and the offshore opportunity should be fully explored. This state desperately needs exports to offset its imports of costly energy, the primary drain in its economy. Though gas is cheap today, it is still imported and must be paid for with local dollars. Its price is sure to rise over time though likely not as much as that of oil. Maine needs a smart energy policy that takes advantage of any and all means to reduce oil imports and that don’t put it at the mercy of one energy source over another. The spin-off benefit of alternative energy generation, including wind, tidal, solar and bio-waste is that it spurs technological innovation and advances technical education. No country or state content to live with the status quo can hope to remain competitive in an ever changing competitive economic environment.
Gas is imported. So what?
So are Florida oranges. Should we start growing our own citrus if it’s cheaper to buy it from elsewhere?
And if we could drill off the coast, we just might hit our own Sable Island. Do you think that might boost the Maine economy? Wind’s high electricity and transmission cost is a net job destroyer, 100 times over.
Transmission rates went up for CMP customers by 19.6% on July 1.If you didn’t read about it, it’s because the newspapers didn’t consider it news.
It’s 100% due to wind power, so they can sell their intermittent power to Ct and Mass, making a handful of insiders like Angus King wealthy.
The whole story can be found by simply googling “What Every Maine Ratepayer Needs to Know”.
Let’s hear it for more delusions of grandeur…..like Coffee and banana plantations in Kennebec county, we need more investment in adopting these essential crops to a warmer Maine.
If it would make money, and be competitive, there would be many large companies flocking to get startups. But it is only workable with massive subsidies and then is still four times the cost of other energies. Europe is bailing on their forty year try with wind, and trying to palm it off on us. There are other ways to take advantage of some of the things we have in Maine to make electricity, and we already lead the nation in renewable energy. Please do a little research and find out how bad an idea this really is.
FYI, there are many companies interested in off-shore wind. Norway is a progressive oil rich nation and its interest in offshore wind should tell you something. As to Europe bailing out, don’t believe all the anti-wind agitation. Scotland, also a gas and oil rich nation, is making off-shore wind a corner-stone of its long-term energy policy. See: http://judithcurry.com/2012/08/15/9412/
As to US subsidies by type of electricity production see: http://solarpowerrocks.com/infographics/u-s-government-energy-subsidies-by-type-of-electricity-produced/
While there are pro and con arguments for wind and almost all other energy sources, if you want to have a debate I suggest you don’t simply resort to the the patronizing “please do a little more research”.
Is it economically feasible, without the aid of government subsidies?
Not remotely close.
No, it is not.
Example: DOE Loan money finances WF
A grant is awarded as a percentage of the total cost of the WF
Therefore, the actual cost per turbine is the loan plus the grant.
The WF developer only pays back the loan.
The grant money is never repaid by the developer.
The real cost of money (if, 7%) is higher than the return on the investment, given that the loans interest rate is amortized at a rate far below any fair market value. The grant money’s costs is awarded on a tax free basis. As the investment depreciates further from the sum of its contrived value the turbines output cost per kWh is always increasing.
In real terms, the farmer maximized the initial cost per turbine in order to maximize the yield from the grant. Turbine cost $5m, awarded grant money of $2m. Actual cost per turbine is $7m. The cost basis to the rate payer is $7m while the base cost to the farmer is only $3m against a loan principal/ investment of $5m over the life of the low interest % DOE loan. Perhaps, 2% over 30 years.
Treasury is out $7m per unit. The farmer owes $5m per unit and pockets $2m cash per unit. Rate payers owe/own all of the above while total aggregated cost exceed the output value of the (1) turbine…
And what of subsidizing oil even as they make record billions? Of course it takes public private partnership to develop emerging energy technologies. Does that mean we dismiss it outright? Do you every think LONGTERM and BIG PICTURE?
Why are we subsidizing oil? I do think long-term and big picture–which is why I support the “private” development of the East-West highway. The “private” developers can build it for $2B, while a federal government build of a similar route was estimated at $12.5B.
Oil provides billions in tax revenue in return for the small investment; wind makes a sucking sound that attracts people like Angus-the-wind-king; and his cronies like Rob Gardner.
NO.
Please people!!! Do a little research!!! The proposed project of building a 500 MW wind farm offshore, is only the beginning. The numbers they are throwing around are small potatoes compared to the $19 to 26 BILLION it will cost to upgrade the grid in Maine that has already raised our rates 19.6%. That raise was for only a $1.4 billion upgrade, which Ibradola, the Spanish company that owns CMP, will not be enough to do the job for the land based turbines proposed. DO THE MATH. The upgrades will cost every ratepayer in Maine more than $4,000.00.
Wind power will not save one gallon of “foreign oil”. Wind has nothing to do with oil. Oil is used to heat your homes and run your cars. And if you think using electricity to heat your home will be cheaper than oil, think again. Right now it is probably a little more than oil, but it is about four times the amount of gas. Less than 1% of electricity in all of New England is produced with oil.
The jobs created are almost all short term construction jobs, and many of those are done by skilled workers that would be brought in from outside the state. The grid upgrades for CMP have used almost all out of state workers. The same is true of the tower construction at the various landbased sites. There are very few long term jobs when the project is up and running.
Remember . . . Ibradola is a Spanish company. Do you know what wind did to Spain? Spain is on the verge of bankruptcy just like Greece. Spain went all out in the wind industry. For every job they created, they lost 2.8 jobs in the private sector. Their unemployment rate is around 25%. Why? Wind made energy so expensive, the manufacturers and industries moved out of Spain, leaving millions unemployed. We are already the fifth highest state in the union in the cost of electric power, in spite of the fact that we produce more than 50% of our power with renewables. With energy prices that high, it is hard to entice industry into Maine. Wind will only make it worse.
Please do some research and find out these things for yourself. You will see that wind saves no CO2, uses electricity to heat and cool the turbines, defiles the mountaintops and ruins our quality of life, produces only about 25% of the nameplate output of the turbines and costs four times the amount per kwh than hydro or gas. It is a bad idea.
Your “research” comes from oil corporation propaganda. This has promise, and wind is successful in locations in Maine and throughout the nation and the world. It is ridiculous to dismiss something like this outright, and very shortsighted. Even Snowe and Collins support this effort. We have a chance to continue to be a national leader on this. It is one promising aspect of an array of clean alternative energy which is the future.
Oil Industry reports are fairly accurate and cross checked constantly by many experts.
Wind Industry reports really are propaganda, as we are learned from the expose of Angus King’s wind ventures and his role in passing self-serving legislation favoring wind farms.
We all remember the hype surrounding the UMPI wind turbine; too bad we can’t jail their President for lying to get a wind turbine that either isn’t working or is producing only 11% of its highly touted output.
Different sources of electrical power won’t heat your home, but it’s a cost avoidance. Less fossil fuel going for electrical generator, less demand, lower costs for homes and car. Imagine how much gasoline and natural gas would cost if none of it went to the production of electricity.
Because everyone knows that we will never, ever run out of oil no matter what.
Why are you censoring my post Bangor Daily News?
ABSOLUTELY we should continue to develop this and see it implented. We are the state that is on the cutting edge of this. We need to our state and the nation into the future. So any naysayers out there can just go punt. We need to actually value science and vision and think toward the future. And the future is new and renewable sources of domestic energy. The future is NOT finite limited dirty expensive fossil fuels. It is not relying on foreign oil. It is not lining the pockets of the oil billionaires with tax WEALTHFARE. It is not kissing the feet of oil company corporate masters.
If I were ‘punting’, your greedy butt would be back in Wall Street or a jail somewhere.
Nuclear power is far more useful and actually pays for itself. Wind power will be subsidized for the life of the program. The demonization of the oil companies is ridicules, they have provided the world with energy needs for a century.
Nuclear power is far more expensive and dependent on taxpayer subsidies than wind power.
Florida is building 2 new nuclear plants at a cost of $22 billion (> $10,000 per installed kW) and taxpayers will get the bill for disposing the spent fuel produced there.
Rate payers – not investors- are footing the bill for that plant – before it produces a sngle watt-hour of electricity.
A nuclear power plant being built in Georgia will recieve over $8 billion in government-guaranteed loans.
Maine Yankee is costing us $10 million a year to babysit its spent fuel in Wiscasset – and hasn’t produce any power for nearly 2 decades.
The last estimate for the Yucca Mountain spent fuel repository in Nevada was over $100 billion – with taxpayers picking up most of that cost.
On-shore wind turbines cost $1000-2000 per kW, have NO fuel costs and NO spent fuel costs – and they won’t melt down.
On-shore wind power is produced here in Maine at $53 per MWh compared to $69 per MWh for hydroelectricity from HydroQuebec.
Off-shore wind is economically viable and our competitors in Europe and China are building massive offshore wind projects to sustain their economies.
Please try to keep up.
Oh yeah – and enjoy yer $4 a gallon gasoline – while it lasts.
Yessah
In comments filed Sept. 7 to the Maine Public Utilities Commission, Fletcher questioned whether Statoil’s Hywind Maine pilot project’s anticipated economic benefits would justify what he believes could be as much as $10 million per year for 20 years in added costs to ratepayers for electricity generated by four floating wind turbines placed in the Gulf of Maine.
Pilot project – not a 500 MW off-shore wind farm.
And LePage administration numbers – ugh.
Please try to keep up.
Yessah
In seeking to address Fletcher’s concerns, the PUC must look beyond the narrow parameters of the pilot project model and view Statoil’s proposal within the context of the potential that floating offshore wind energy offers Maine. The project’s cost must be viewed as an investment in innovation — one that has already attracted more than $30 million in private funding, according to Dr. Habib Dagher of the University of Maine’s Advanced Structures and Composites Center, which is working on prototype floating turbines.
Angus King gave the power compainies the closing fees for Maine Yankee 6 months before it closed.. the ratepayers paid 125 millon in fees for the closing, King gave the money to Bangor Hydro and CMP. Then when they closed they cried we don’t have the money to close it, so who had to pay it again? The rate payers.
And then there’s the “Murphy’s Law” of taxpayer savings,
where if something goes wrong, like on an Oil Platform in the gulf of Mexico,
or a Nuclear Meltdown like in Japan from the earthquake….if something could go wrong….”Murphy’s Law”…….. the damage costs of the clean up to the environment, the human health costs, the economic losses…….millions of dollars…….
“You know what happens when windmills collapse into the sea? A splash.”
― Bill Maher
When comparing the risk trade-offs of oil drilling / nuclear, to renewable energy like wind power, it’s a no brainah.
Offshore wind power will result in electricity rates at least 4 times what they are now. Think what this will do to home budgets. Then think how this will drive out all industry from this state.
It’s about getting every last dime from the people.. There is a battle out there amoung businesses on who is going to get the last dime.. Heating oil, Gas, Electricity,food, housing, insurance,eduction, who is going to get it???
Time to end the ‘carbon’ justification for these expensive ventures. Despite falling levels of CO2; temps keep going up. Wind farms remove forest and other vegetation that removes CO2 and sequesters carbon; yet they aren’t required to provide an offset to the destruction of this natural cleansing biomass.
I would prefer that we instead dramatically lower the cost of energy in Maine; and invest money in improving the housing stock starting with public and low income housing—-NOW THAT’s WHERE THE REAL JOBS ARE!
You don’t know what you are talking about. Atmospheric CO2 levels have been rising, and are continuing to rise according to measurements in both polar and tropical regions. Wind farms remove a tiny fraction of forest cover compared to logging operations, and they help to offset the need for more new coal-fired generation to keep up with the ongoing population explosion. Denying reality will not change it. Praying for it to go away will not stop global warming. People like you are not helping humanity at all.
http://researchmatters.noaa.gov/news/Pages/arcticCO2.aspx
http://www.esrl.noaa.gov/gmd/ccgg/trends/
Republicans once again hammer the entrepreneurs, job creators and risk takers that will bring $$$$ to Maine.
Yessah
The Energy cube would be a better product for the People.. But how would the criminals make billions on the people if it was made available/
Tinserblic, you old windshill.
No, my research comes from international scientists and economists that have put some time into studying what wind is doing to economies and environments around the world. There is no hope for Wind until they can find a way to store the skittering and intermittant production from the turbines that so defile the environment. We are Not a national leader in the wind business, and so far it has raised our rates and spoiled or land. The real lie is that “we are the Saudi Arabia of wind.” We are in the Lowest 89th percentile for wind in Maine. That is a Windshill LIE!
The other problem for everyone in alternative energy development are the alternative (1603) energy grants/ incentive awards, tax credits, followed on by DOE low interest loans designed Pre- QE1-3. Those awards were all based on normal/variable interest rate values for working capital and never adjusted for capital dilution through stimulus/subsidized QE Federal Reserve capital.
By design 1603s were never intended to be used with QE. As a result most alternative energy projects have opted for the cash grant awards (1603 has leveraged $18 billion ) over the tax credit, because of the present value of the cash is now greater than the value and use of the tax credit. That further allows the developer to leverage tax free grant money to qualify for more low interest DOE loans in continuum of 1603 funds as each project is completed.
Quote:According to Rhone Resch, the CEO of the Solar Energy Industries Association (SEIA), 1603 has leveraged $18 billion in renewable energy projects for “an incredible return on the taxpayer dollar.” He added that 1603 is “simply the most important policy for continuing renewable energy growth in the U.S.” The 1603 grant provides a direct payment rather than a tax credit and was implemented to address the lack of available tax equity during the financial meltdown. http://seekingalpha.com/article/242118-senate-extends-tax-grant-program-solar-wind-industry-rejoice
“No More Solyndras” Act Passes the House”
The bill aims to end the loan guarantee program through the U.S. Department of Energy by preventing DOE from issuing loan guarantees on applications received after the end of 2011, and sets new restrictions on existing applications and loans.
http://www.renewableenergyworld.com/rea/news/article/2012/09/no-more-solyndras-act-passes-the-house?cmpid=WNL-Wednesday-September19-2012
Wow, this is the first time my comments have been erased by the BDN. What gives?
Well, my comment was removed again. It was not vulgar, it was civil, it stayed on topic. I’m going to suggest a dart for the BDN. It is a tremendous betrayal of public trust when comments are censored in what use to be my favorite newspaper.