By David Wojick
The State of Maine just got a very strange offshore wind lease from the Feds. They call it a research lease as opposed to a commercial development lease. It has some mysterious features that are worth pondering.
There may even be a many-billion-dollar trick here. We consider that at the end, after briefly explaining the mysteries.
To begin with, the lease is for a 144-MW “research array” of turbines, as it is called. Well, 144 MW is huge for research. The South Fork Wind site (fixed, not floating) that is already running is a 12-turbine, 132-MW commercial facility, so this array will be bigger than commercial.
It could cost $3 billion, plus the cost of the factory to make the dozen or so floaters. Different websites suggest different turbine sizes from 10 to 12 MW. Of course, if this is really research, they might use a variety of sizes, but the total is still huge.
Why so big is the first mystery, and the official explanations are far too vague to justify it. They mostly talk about research into things like efficiency, supply chain, and even jobs.
They also say the research results will feed into the commercial floating wind developments, which are pegged at 15,000 MW in the Gulf of Maine. This seems unlikely because research takes time.
Commercial leases for the gulf are due to be sold in the next few months (The Biden-Harris folks want to get as much leased before the election as possible, lest Trump win.) The research array has to go through the same permitting processes as the commercial sites.
The commercial site developments and the research array development are starting at the same time and going through the same steps. So it is hard to see how the commercial sites might benefit from the research, especially since the research is likely to slow down the array development. Research done after the array is running will be even later after the commercial facilities are up and running. Thus, who would benefit from this multi-billion dollar research is the second mystery.
“Who pays these billions seems to be clear, as the developer is supposed to negotiate a power purchase agreement (PPA) with one or more of the big Maine utilities.”–David Wojick
Who pays these billions seems to be clear, as the developer is supposed to negotiate a power purchase agreement (PPA) with one or more of the big Maine utilities. The developer looks to be Diamond Offshore Wind, owned by Mitsubishi Corporation. They have been actively involved with the University of Maine’s patented floating wind technology for a good while.
Here, things get truly murky. First, if a PPA is supposed to pay for the array, plus profit, then it is very much a commercial development. Second, research is expensive and unpredictable so how can there be an advance PPA to pay for it?
There is no mention of the research being funded separately from the array, which would be complicated to say the least. For that matter, who decides what research to do as things progress? Diamond, the University? The State of Maine? It looks like Diamond works for Maine, but it needs to make money on the deal, which makes things very strange.
All that said, there is another possibility. This project is not about research. It is about building the floater factory and demonstrating the university’s technology.
There is a monster wild card in the floating wind game. That is the factory. Fixed bottom wind is very simple onshore. All you need is a good dock, a big crane, and a place to sit the components until they are taken to the site and installed. There are just a few simple components — monopile, tower, turbine, and blades. It’s all made elsewhere.
Floating wind is made from scratch onshore then towed as a whole to the offshore site. The Uni-patented technology uses concrete floaters which might weigh 15,000 tons or more and are complex structures. Factory construction of floaters will be a huge job.
This fact about floating wind is seldom mentioned, and when it is, the language is usually deceptive. The industry talks about “ports,” not factories, and the Maine floater factory is called a port. See my. note that the factory will be operated by Diamond.
So here is what might happen. As part of the “research,” Maine builds the floater factory and enough floaters to demonstrate that the patented Uni- technology works. Developers of the 15,000-MW of commercial Gulf wind have to choose technologies for their various sites. If they choose any other technology, out of over a hundred candidates, they will have to build the factory to make it.
That the Uni-tech factory already exists is a powerful incentive to use that technology. We are talking about maybe $100 billion in floaters.Maybe more. Under this scenario Diamond makes a huge amount of money, and so do the University of Maine and the State of Maine. So do all the suppliers and workers. Whether this is all legal is a question since demonstrating a patented floater technology is not research.
Mind you I am not claiming this is what is going on, but it certainly makes sense out of this supposed research array. The primary obstacle is that the Uni-technology has never been built at 10-12 MW scale and it might not be feasible. Also, the factory design that I have seen does not work, but that is a separate issue.
Watching this two hundred-billion-dollar floater game unfold will be very interesting indeed.
David Wojick is a senior policy advisor at the non-profit Center for a Constructive Tomorrow (CFACT), an organization founded in 1985 that advocates for free-market solutions to environmental issues. He has a Ph.D. in the philosophy of science and mathematical logic from the University of Pittsburgh and a B.S. in civil engineering from Carnegie Tech. He has been on the faculty of Carnegie Mellon University and the staffs of the U.S. Office of Naval Research and the Naval Research Lab.