Update: Statoil exits Maine Hywind

Norwegian oil giant Statoil has walked away from its highly anticipated 12MW floating wind turbine pilot off the Maine coast after changes in legislation scuttled an emerging electricity supply deal between the company and the US state.

Recharge has learned the company now planned to "demobilise resources" linked to its $120m Hywind Maine demonstrator, which was to have installed a quartet of the 3MW second-generation spar-buoy machines in 140-158 metres of water.

"The project outlook all in all became too uncertain to progress in Maine, and we will focus our resources on the Hywind project in Scotland going forward," says a Statoil spokesman.

The decision was not surprising given events this year that undermined Statoil's project.

It started well on 24 January, when after a year of negotiations with the company's North American subsidiary, state regulators approved a term sheet detailing commercial provisions for a long-term electricity supply contract covering the Hywind project.

Maine’s Public Utilities Commission (PUC) directed electric utility Central Maine Power to enter into a power purchase agreement with Statoil consistent with those terms.

Things went sour in June. The state legislature passed a bill at the urging of Governor Paul LePage's administration that effectively postponed any final deal by allowing a University of Maine-led consortium to submit a proposal in competition with Hywind for ratepayer subsidies.

The public-private consortium in late May launched in state waters a 1:8 scale wind turbine on a concrete-composite platform prototype called VolturnUS. It plans a 12MW full commercial-scale project in federal waters called Aqua Ventus.

It did not participate in the original 2011 request for proposals by PUC, which selected the Hywind project for ratepayer support.

LePage, a Republican and critic of wind energy, had strongly criticized PUC backing for Hywind on grounds that the proposed electricity rates were too high - implying a $200m subsidy - and the project would have little long-term positive impact for Maine's economy.

It later emerged that his administration was actively working behind the scenes to "stop the Statoil project," according to an email written in May by Patrick Woodcock, director of the governor's energy office.

He told The Associated Press that the move to reopen bidding was due to "exceptional circumstances" that required intervention by the state to help the university's project.

Statoil responded to the bill signed by LePage by freezing work on its project. The university's consortium has since submitted a confidential bid to the PUC.

Ironically, both Hywind and Aqua Ventus were among seven selected last December by the US Energy Department for up to $4m funding to complete engineering, design and permitting for their projects.

Late this year or in early 2014, DOE will select up to three of these projects for follow-on phases that focus on siting, construction and installation, and aim to achieve commercial operation by 2017. They will receive up to $47m each over four years, subject to Congressional appropriations.

Despite Statoil's departure from Maine, it remains interested in the US market.

"Regardless of our exit in Maine, we will continue to explore the US offshore wind market," says Trine Ulla, head of business development for floating wind in Statoil. "The US holds several locations with good wind conditions, deep waters and proximity to load centers.

Statoil will now focus attention on its Buchan Deep development – a five 6MW Hywind 2 array moored in 95-120 metres of water 25km off Peterhead – would be a front-runner in the race to be the world's first multi-unit floater development.

Statoil has carried out marine surveys at Buchan Deep, one of the offshore wind turbine demonstrator sites being tendered by the UK's Crown Estate for arrays of up to 15 turbines producing 100MW.

"We have conducted some marine surveys and hope for a continued positive dialogue with Scottish authorities," said the spokesman.

Statoil deployed its flagship Hywind unit, a 2.3MW prototype built with contractors Technip and Siemens, in 2010 off the coast of Norway.

A floating wind farm demonstrator project off Japan using Hywind 2s continues to move ahead, with the Norwegian group and developer Hitachi Zosen having launched a feasibility study for a site-specific model of the concept earlier this year.