Maine PUC questions offshore wind project

PUC questions offshore wind project, seeks greater commitment from Statoil

Posted Oct. 04, 2012, at 7:53 p.m.
Last modified Oct. 04, 2012, at 8:33 p.m.

HALLOWELL, Maine — The Maine Public Utilities Commission on Thursday suggested that Statoil North America revise its proposal to provide greater assurances that Maine will reap long-term benefits from a pilot wind energy project off the coast of Maine.

Otherwise, two of the three commissioners said they would not support it.

“The commission will issue a procedural order to suggest ways the term sheet could be improved,” said Karen Geraghty, administrative director of the PUC. She said she expects the order to be released Friday or Tuesday.

After two hours of discussion Thursday, commissioners Mark Vannoy and Thomas Welch said they would not vote for the term sheet as written. They expressed concerns about the impact on ratepayers of the higher cost of electricity generated by the pilot project, which would place four floating wind turbines off the coast of Maine, and about what commitments Statoil could make to extend its relationship with Maine beyond the pilot project.

“Statoil was hoping for a unanimous conclusion from PUC today to be able to continue maturing the project,” Ola Morten Aanestad, Statoil North America’s vice president for communications, wrote in an email. “We now need to take this information we got today back, and evaluate how we can proceed further.”

As a pilot project for more extensive development of offshore wind energy production, Statoil North America proposes to moor four floating turbines in federal waters off the coast of Maine to generate 12 megawatts of energy. On May 2, 2011, Statoil North America submitted a proposal for the project, called Hywind Maine, to the Maine Public Utilities Commission, which had issued a request for proposals after the Legislature passed the 2010 Ocean Energy Act.

Habib Dagher of the Advanced Structures and Composites Center at the University of Maine, which is working with Statoil and independently to refine floating offshore wind energy turbine technology, emphasized that the PUC commissioners did not question the viability of using floating turbines for offshore wind energy generation. He described Thursday’s deliberations as part of a complex negotiation process.

“The commission is looking out for the interests of the state of Maine,” Dagher said Thursday by phone. “I hope we can find a middle ground and move forward.”

“As far as the university is concerned, we would like to see Statoil come to Maine, but the University of Maine is still moving forward with plans to have a prototype turbine in the water during the first quarter of 2013. They are an excellent company,” Dagher said of Statoil. “Having them come here is like having GM or Apple come here. We all want them to come to Maine and invest in Maine.”

In comments responding to the term sheet Statoil submitted in August, Ken Fletcher, director of the Maine Energy Office, raised questions about the impact on ratepayers and the return on Maine’s investment in the project.

“The proposal sets the electricity price at a minimum of $290/MWh, which is significantly higher than historic and current prices,” Fletcher wrote. “Over the 20-year contract term, Maine ratepayers could be required to pay $203 million higher costs.”

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Comment by Willem Post on October 5, 2012 at 1:17pm

Here are some costs/MW for offshore wind facilities and their energy costs/kWh

Cape Wind and Other Offshore Wind Facilities 

Cape Wind Associates, LLC, plans to build and operate a wind facility on the Outer Continental Shelf offshore of Massachusetts. The wind facility would have a rated capacity of 468 MW consisting of 130 Siemens AG turbines each 3.6 MW, maximum blade height 440 feet, to be arranged in a grid pattern in 25 square miles of Nantucket Sound in federal waters off Cape Cod, Martha’s Vineyard, and Nantucket Island; the lease is for 46 square miles which includes a buffer zone. 

The Massachusetts Department of Public Utilities approved a 15-yr power purchase agreement, PPA, between the utility National Grid and Cape Wind Associates, LLC. National Grid agreed to buy 50% of the wind facility’s power starting at $0.187/kWh in 2013 (base year), escalating at 3.5%/yr which means the 2028 price to the utility will be $0.313/kWh. The project is currently trying to sell the other 50% of its power so financing can proceed; so far no takers.

A household using 618 kWh/month will see an average wind power surcharge of about $1.50 on its monthly electric bill over the 15 year life of the contract; if the other 50% of power is sold on the same basis, it may add another $1.50 to that monthly bill.

Power production is estimated at 468 MW x 8,760 hr/yr x CF 0.39 = 1.6 GWh/yr. 

The capital cost is estimated at $2.0 billion, or $4,274/kW. Federal subsidies would be 30% as a grant.

The 28.4 MW Block Island Offshore Wind Project has a 20-yr PPA starting at $0.235/kWh in 2007 (base year), escalating at 3.5%/yr which means the 2027 price to the utility will be $0.468/kWh. A State of Rhode Island suit is pending to overturn the contract; the aim is to negotiate to obtain a lower price.

Power production is estimated at 28.4 MW x 8,760 hr/yr x CF 0.39 = 0.097 GWh/yr.

Capital cost is estimated at $121 million, or $4,274/kW. Federal subsidies would be 30% as a grant.  

The 200 MW Delaware Offshore Wind Project has a 25-year PPA starting at $0.0999/kWh in 2007 (base year), escalating at 2.5%/yr which means the 2032 price to the utility will be $0.185/kWh.

Power production is estimated at 200 MW x 8,760 hr/yr x CF 0.39 = 0.68 GWh/yr.

Capital cost is estimated at $855 million, or $4,274/kW. Federal subsidies would be 30% as a grant. 

For comparison: TransCanada Power which owns the 132 MW Kibby Mountain Wind Facility in Maine has a 10-yr PPA with NStar, an electric utility, at a flat $0.105/kWh, plus the associated renewable energy certificates.

Power production is estimated at 132 MW x 8,760 hr/yr x CF 0.31 = 0.357 GWh/yr.

Capital cost is estimated at $320 million, or $2,424/kW. 

The above PPA prices cannot be directly compared because they are influenced by factors other than generating costs. See pg 119 of the NREL website. 

The 1,000 MW Deep Water Wind Project with 500 ft tall wind turbines @ 5-6 MW each is proposed to be located in Long Island Sound. Power is expected to be sold “in the mid teens”, i.e., at about $0.15/kWh.

Production is estimated at 1,000 MW x 1,000 kW/MW x 8,760 hr/yr x CF 0.40 = 3.5 GWh/yr. 

Capital cost, with interconnects to existing grids, is estimated at 4.5-5.5 billion dollars.

For comparison: Production by 471 MW of CCGTs: 471 MW x 1,000 kW/MW x 8,760 hr/yr x CF 0.85 = 3.5 GWh/yr.

Capital cost: 471 MW x $1,250/kW = $589 million. 

 

http://green.blogs.nytimes.com/2010/12/09/wind-facility-would-link-...

http://www.southcoasttoday.com/apps/pbcs.dll/article?AID=/20101123/...

http://www.brighterenergy.org/15568/news/wind/rhode-island-offshore...

http://theenergycollective.com/brighterenergy/47584/america-moves-s...

http://www.env.state.ma.us/dpu/docs/electric/10-54/73010tntst.pdf

http://www.nrel.gov/docs/fy10osti/40745.pdf

http://www.coalitionforenergysolutions.org/maine_wind_facilities.pdf

http://finance.yahoo.com/news/Wanted-Buyer-for-apf-120662485.html?x...

Comment by Dan McKay on October 5, 2012 at 5:17am

No favors from the PUC. Let Statoil sell their product by bid into the market.  A $290/ MWH bid against a $29/ MWH bid ? What would a free market do ?

Comment by Donna Amrita Davidge on October 4, 2012 at 9:47pm

they should question any wind project and not approved of the First Wind Emera deal.

Hannah Pingree on the Maine expedited wind law

Hannah Pingree - Director of Maine's Office of Innovation and the Future

"Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine."

https://pinetreewatch.org/wind-power-bandwagon-hits-bumps-in-the-road-3/

 

Maine as Third World Country:

CMP Transmission Rate Skyrockets 19.6% Due to Wind Power

 

Click here to read how the Maine ratepayer has been sold down the river by the Angus King cabal.

Maine Center For Public Interest Reporting – Three Part Series: A CRITICAL LOOK AT MAINE’S WIND ACT

******** IF LINKS BELOW DON'T WORK, GOOGLE THEM*********

(excerpts) From Part 1 – On Maine’s Wind Law “Once the committee passed the wind energy bill on to the full House and Senate, lawmakers there didn’t even debate it. They passed it unanimously and with no discussion. House Majority Leader Hannah Pingree, a Democrat from North Haven, says legislators probably didn’t know how many turbines would be constructed in Maine if the law’s goals were met." . – Maine Center for Public Interest Reporting, August 2010 https://www.pinetreewatchdog.org/wind-power-bandwagon-hits-bumps-in-the-road-3/From Part 2 – On Wind and Oil Yet using wind energy doesn’t lower dependence on imported foreign oil. That’s because the majority of imported oil in Maine is used for heating and transportation. And switching our dependence from foreign oil to Maine-produced electricity isn’t likely to happen very soon, says Bartlett. “Right now, people can’t switch to electric cars and heating – if they did, we’d be in trouble.” So was one of the fundamental premises of the task force false, or at least misleading?" https://www.pinetreewatchdog.org/wind-swept-task-force-set-the-rules/From Part 3 – On Wind-Required New Transmission Lines Finally, the building of enormous, high-voltage transmission lines that the regional electricity system operator says are required to move substantial amounts of wind power to markets south of Maine was never even discussed by the task force – an omission that Mills said will come to haunt the state.“If you try to put 2,500 or 3,000 megawatts in northern or eastern Maine – oh, my god, try to build the transmission!” said Mills. “It’s not just the towers, it’s the lines – that’s when I begin to think that the goal is a little farfetched.” https://www.pinetreewatchdog.org/flaws-in-bill-like-skating-with-dull-skates/

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