Maine ocean energy advances

Wednesday, December 7, 2011

Maine's offshore wind industry may be moving forward, as the federal agency responsible for offshore wind site leasing is now considering a request by Norwegian energy company Statoil to lease a site for a Maine deepwater floating wind project.
Uninhabited Damariscove Island, off Boothbay Harbor, Maine.

The Maine site for which Statoil has applied lies over 12 miles offshore, south of Boothbay Harbor.  It lies in United States waters south of Damariscove Island.  This places the site near the pre-selected Damariscove Island wind site in Maine state-jurisdictional waters.  Statoil's proposed site is also southwest of the Monhegan offshore wind site.

Statoil's request to the federal Bureau of Ocean Energy Management was submitted on an unsolicited basis.  No BOEM Call for Information and Nominations (the agency's primary competitive solicitation tool) was in effect for these waters.  Under current regulations, unsolicited leases face a slightly different process for review, including a determination of whether there is any competitive interest in the site.

(You can read four public pages from Statoil's application here.)

Statoil is a large and diverse energy company headquartered in Stavanger, Norway, and owned primarily by the government of Norway.  Statoil's portfolio includes petroleum, gas, pipeline, and electric utility businesses.  Statoil is now exploring ocean energy opportunities, and developed the world's first full-scale floating wind turbine, the 2.3 megawatt Hywind unit.  Statoil has applied for a site lease off Maine, which could be its first US offshore wind site.

BOEM has deemed Statoil NA's lease application to be complete, and the applicant to be legally qualified.  Now BOEM is engaged in a review of Statoil's technical and financial qualifications.

Tomorrow morning, a joint state-federal task force will meet to review Statoil's request.  The Maine Task Force of the Bureau of Ocean Energy Management consists of a broad array of agency representatives.  Tomorrow's meeting will feature presentations by representatives from the governor's energy office, Maine Public Utilities Commission, United States Coast Guard, Department of Defense, NOAA, as well as BOEM and the Department of Interior itself.  This meeting will be held on December 8 at the Marriot Hotel in South Portland, Maine, at 9:30 a.m.

Separately, Statoil is negotiating with staff from the Maine Public Utilities Commission for a long-term contract to sell the project's output to utilities.  Statoil responded to the Maine commission's 2010 request for proposals for pilot floating offshore wind projects.  This offshore wind long-term contracting program was established by a Maine law designed to facilitate the development of a deep-water offshore wind energy pilot project.

If the Commission approves a long-term contract for the project's output, it could give the wind farm sufficient revenue certainty.  At the same time, the Commission is required to weigh the costs and benefits of any such contract, and must find that ordering a utility to buy the energy, capacity and renewable energy credits at the price and other terms proposed would not have an unreasonable impact on the utility's rate.

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