Maine’s 12MW floating Aqua Ventus pilot project hit a snag this week, but the developer tells Recharge it can address any concerns the state’s Public Utilities Commission (PUC) may have and remains eligible for a critical $40m grant from the US Department of Energy.
The two-turbine project, led by the University of Maine, appeared in jeopardy earlier this year when Maine’s PUC delayed approving a power-purchase agreement whose broad terms were agreed in 2014.
On Tuesday the PUC formally voted to review the so-called term sheet for Aqua Ventus, citing changes both to the project itself and to the broader landscape for US power-generation.
“The Commission understands the importance of this project to [Maine Aqua Ventus] and its stakeholders,” Maine PUC Chairman Mark Vannoy said in a statement.
“On the other hand, it is incumbent on the Commission to ensure that the proposal continues to meet the legal requirements established by the Maine legislature … and remains in the public interest of Maine citizens and businesses.”
The off-take price agreed in 2014 was for roughly $230/MWh with an annual escalator, attached to a 20-year contract.
The PUC estimates Aqua Ventus will cost Maine ratepayers in excess of $200m over those 20 years. Supporters of the project say it will cost home ratepayers less than $1 a month in its first years.
Habib Dagher, who leads the project as executive director of UMaine’s Advanced Structures and Composites Center, explains that the PUC simply wants more information, adding that Commissioner Vannoy “had very good things to say about the technology that was developed at the university and the progress that’s been made” at the hearing.
“The good news is they didn’t say no,” Dagher tells Recharge. “They said, why don’t you help us answer these questions, and then we’ll come back to you and give you an answer [on the PPA].”
Aqua Ventus is now hoping to reach financial close in 2019 and commercial operation in 2021 off Monhegan Island, Dagher says, a year later than previously planned.
Among the PUC’s questions are what the rapid acceleration of the US offshore market means for Aqua Ventus, and what impact a new investor will have on local economic development, Dagher says.
Since the PUC approved the term sheet in 2014, utility Emera has cut ties with Aqua Ventus while France’s Naval Energies has joined the development consortium, which also includes Maine construction firm Cianbro Corp.
“Those are questions we have good and easy answers to,” Dagher says.
On the question of price, Dagher acknowledges that “it’s the PUC’s role to make sure they get the best deal” for ratepayers.
But he says Aqua Ventus’ initial PPA price of 23 cents/kWh is “very reasonable” compared to similar-sized floating demonstration projects in places like France and Norway, and he highlights the potential lasting benefits to Maine’s economy if it secures a leadership role in the US floating wind sector, including local manufacturing jobs.
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“I don’t think we’re going to need to drive the cost down” to secure the PUC’s approval, he says. “Of course we’ll try – we’d like to if we can. But we haven’t left any stone uncovered in trying to do that, and we can demonstrate that to the PUC.”
As long as the PUC ends up approving Aqua Ventus’ PPA, the project will remain eligible for a $40m grant from the Energy Department, Dagher says. “DOE is very understanding of the questions the PUC has, and they’re willing to work with us.”
Central to the case for Aqua Ventus is the prospect of launching Maine to the forefront of the as-yet-nonexistent floating offshore wind market. Dagher believes the floating market will be bigger in the US than many realise, including in New England.
Of the four offshore zones currently delineated south of Massachusetts – two already leased out, and two to be auctioned off later this year – “more than half the capacity could be developed using floating technology”, Dagher says.