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Statoil Withdraws Proposal for Maine Offshore Wind Project
10/15/2013   Reported By: Susan Sharon

Norwegian energy giant Statoil is calling it quits in Maine. The company that had proposed a $120-million floating windpower project off the coast of Boothbay Harbor is abandoning the effort, citing political and regulatory uncertainty. The company had previously put the project on hold. But as Susan Sharon reports, supporters of the company and its plans view the announcement as a huge disappointment and major setback for offshore wind in Maine.

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Statoil Withdraws from Maine Project Listen
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Statoil first put its deepwater wind project, known as Hywind, on hold in July after Republican Gov. Paul LePage pushed to reopen a competitive bidding process and the Legislature agreed. The governor thought Statoil's proposal carried too high a cost for electricity ratepayers and failed to guarantee an economic benefit to the state.

He encouraged the University of Maine and its partners to take on the 12-megawatt pilot project. This, after Statoil had invested time, energy and millions of dollars on its application and received preliminary approval from the Public Utilities Commission earlier this year.

On Tuesday the company announced it was giving up its Maine proposal all together. Ola Morten Aanestad is the company's vice president of communications for North America. "The project outlook, all in all, became too uncertain to progress," he says.

Aanestad declined to discuss specifics, but in a written statement, the company cited changes in framework and commercial conditions in the state and scheduling delays that made the project outlook too uncertain to proceed. Instead, Statoil says it plans to develop its Hywind proposal in Scotland.

"It's extremely disappointing - and I guess not too surprising," says Sean Mahoney of the Conservation Law Foundation. Mayoney says all Statoil wanted - and all it should have gotten - was a fair and transparent and consistent regulatory process for consideration of its proposal. When the Legislature agreed with the governor to re-open the contract, Mahoney says the damage was done.

"And Maine is going to suffer as a result because we are losing a very good opportunity to develop a new source of clean energy, and a source of jobs and value for our economy," Mahoney says. "It's just - it's mind boggling."

The University of Maine-led consortium, called Maine Aqua Ventus, which has now submitted its own offshore wind proposal, declined to discuss Statoil's announcement on tape. But in a written statement issued Tuesday, officials said the university will pursue a contract with the state Public Utilities Commission, and seek grant funding from the U.S. Department of Energy. It goes on to say: "We are here to stay and look forward to competing against other projects nationally and helping to realize Maine's full offshore wind development opportunity."

Both Statoil and UMaine had been in competition with several other projects around the country for a federal Department of Energy grant worth nearly $50 million. But Democratic Senate President Justin Alfond of Portland says Statoil's departure sends a signal that something isn't right in the state of Maine.

"I've got to think to myself that the United States Department of Energy is scratching their head wondering how Maine let a major, multi-national company, who already has millions of dollars on the ground, get away," Alfond says. "And so I think it hurts Maine's standing as we get ready for the next round - hopefully - for the United States Department of Energy grants."

Patrick Woodcock, the director of the Governor's Energy Office, doesn't think Statoil's departure from the state will have any bearing on whether the University of Maine successfully competes for federal funding. He says the bottom line is that Maine needs to develop its wind resource in a way that makes sense for ratepayers and in a way that grows Maine jobs.

"Maine's offshore wind resource isn't going away," Woodcock says. "We have one of the best quality winds in the world and that attracted initial investment. And we should utilize that resource when it makes sense for the Maine economy. We shouldn't say yes to every company. We shouldn't say yes to any proposal. We should develop this resource in a manner that Mainers will benefit."

Senate Republican leader Michael Thibodeau released a written statement about Statoil's departure, saying "bringing jobs to Maine should be a priority for all of us." But Thibodeau went on to question whether the federal government's regulatory process and uncertainty in Washington are really to blame for Hywind's demise.



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