The U.S. Department of Energy will grant a University of Maine-led offshore wind project a fraction of the funding its leaders hoped for, raising new questions for developers who are seeking a path to building two full-scale offshore test turbines at a site near Monhegan Island.

The federal agency on Wednesday offered full funding of up to $47 million to three other wind projects in Oregon, New Jersey and Virginia. While the university’s project was not selected from a field of six competing finalists, it was designated as an alternate grant recipient — if additional federal funds become available — and given $3 million to continue the design and engineering work necessary to place a full-scale test in the water.

“It would be hard to say, hearing this news, if we have a clear path forward, but that’s part of taking a new technology to the marketplace,” said Jake Ward, the university’s assistant vice president for innovation and development. “We believe that full-scale demonstration is the next step and we’ll try to get there however possible.”

Ward said the Maine Aqua Ventus project is about halfway through its design and engineering phase, which he expects will be completed with the help of the DOE’s $3 million award.

“A complete design package is what we need to pursue financing and permitting,” Ward said. “We’ll continue on that path and see what doors we can open as we move forward.”

Ward said it’s too early to tell whether the project will look to greater support from its primary private-sector partners, Cianbro Corp. and Emera.

The full $47 million grant award would have required at least a dollar-for-dollar match from the project, Ward said. The estimated cost of putting two full-scale, grid-connected turbines in the water depends in part on continued design and engineering work, but Ward said officials estimate it would cost between $100 million and $150 million.

Last June, the university, which had received $4 million in federal funding for the project, deployed a one-eighth scale model of VolturnUS, its prototype floating turbine, in waters off Castine. The turbine began generating power that month and became the first offshore wind turbine in the Americas to send electricity into the power grid.

The university’s nearest competitor for funding — a project in Oregon also using a floating platform — received full funding. Fishermen’s Energy off the coast of New Jersey and Dominion Virginia Power off the coast of Virginia Beach also received full funding.

Annette Bossler, an international wind energy consultant based in Bremen, said that she was not surprised by the Department of Energy’s decision Wednesday because the Oregon project is further along in development — with a pilot project in Europe — and the deep water conditions on the West Coast align more closely with the majority of the wind resources off the shores of the United States.

“The vast majority of the wind resources [in New England] are in shallow water,” Bossler said. “It’s a completely different story on the West Coast, where the water is so deep that unless you use floating technology you can’t do anything there, so the market for [floating] offshore wind is really on the West Coast.”

Bossler also noted that it was unlikely that the federal government would pick two floating concepts from the field of six competitors for the final grant award.

Ward said he viewed the award to its competing floating wind project as an endorsement of the concept, which stands to help the university’s future research.

“We’re impressed that the DOE believes in floating technology,” Ward said. “Having a full-scale floating demonstration project is moving the state of the art and we believe our innovations can contribute to that art.”

In addition to innovations in the turbine technology itself, the university has researched complementary devices, such as a high-tech buoy that uses lasers to gauge wind speeds high above the water and can help engineers identify spots to place offshore turbines.

Maine Aqua Ventus’ long-term vision is the construction of a 500-megawatt offshore wind farm in the Gulf of Maine. The goal is to achieve wind-generated electricity at 10 cents per kilowatt-hour by the mid-2020s, which would be competitive with other forms of electricity generation.

Maine’s congressional delegation and the head of the Governor’s Energy Office lamented the decision but tried to put a positive spin on the announcement, stating continued support for the project.

“The administration will continue to support the university in developing new and clean energy technology, which will reduce rates for Mainers,” Patrick Woodcock, director of the energy office, wrote in a prepared statement.

Ward, at UMaine, highlighted similar points, saying that the potential for wind energy in the Gulf of Maine is still strong.

“The wind resource is still there, and the need for cost-effective alternative power is still there, and the need for jobs and economic development is still there, and so we’re continuing to pursue solutions for those problems,” Ward said.

Support of the project previously became a hot political topic when Gov. Paul LePage pushed for lawmakers to allow the Aqua Ventus pilot project to ask the Maine Public Utilities Commission for ratepayer support.

Previously, the commission had approved a revised term sheet for a wind power project proposed by Statoil, a Norwegian company. LePage long opposed the deal and persuaded lawmakers to pass legislation reopening the process to allow the Aqua Ventus project to be considered alongside Statoil’s.

In October, Statoil announced it was abandoning the Maine project due to uncertainty about Maine’s regulations. Until then, Statoil’s Maine project had been a competitor for the larger federal grants.

The PUC approved a term sheet for the Aqua Ventus project in January. The term sheet calls for the Maine Aqua Ventus pilot project to sell electricity to CMP for 23 cents per kilowatt-hour.

Darren Fishell

Darren is a Portland-based reporter for the Bangor Daily News writing about the Maine economy and business. He's interested in putting economic data in context and finding the stories behind the numbers.