Mainebiz

w w w. m a i n e b i z . b i z 15 Ja n ua r y 1 2 , 2 0 1 5 the price they would get in the market is a function of the natural gas price in New England. MB: So, to get the lowest possible price for that Canadian hydropower, we would need to lower the cost of natural gas flowing into New England first? TW: Exactly. I encourage people to think about the following proposition: If you are serious about trying to buy significant additional 'zero carbon' resources from Canada, it will be cheaper for you to do that if you solve the natural gas problem. Otherwise, if you don't, they'll charge you a much higher price for that hydropower. So the particular questions for getting addi- tional power from Canadian and northern Maine resources are: How much additional transmission do you have to build? And what's the cost going to be, against the benefits? MB: Offshore wind is another big issue you've grappled with. What's your perspective? TW: For a variety of reasons, I felt it was a good idea to see if Maine could be developed as a center of expertise and experience in terms of offshore wind power, which the UMaine pilot project would give us some ability and opportunity to do. e question of whether there really is a viable opportunity in the next 20 or 30 years for a major offshore wind power project, that's a very hard question to answer. I actu- ally think it's made much more difficult by the low cost of Marcellus Shale natural gas, because it means offshore wind's ability to reach a competitive price against the market will be that much harder to hit. MB: How would you characterize Maine's on- shore wind power industry's prospects? TW: I think continued development is likely. Maine has a good wind resource. e question of whether Maine can and should exploit that wind resource depends a little bit on the question of what Maine should be selling to the rest of the world? If you are selling pristine landscapes, you need to think about where you want to put those wind turbines. On the question of cost, it's true the cost curves are coming down for onshore wind power. But you also have to look at whether the cost curves are coming down for the other energy sources as well. MB: Any closing thoughts or comments? TW: I think the winter-time price spike for electricity that we are currently experiencing, which started last winter and will continue for a little while longer, is and will be challenging. I think businesses, in particular, will need to look at what they can do — for example, how they produce things; the products they buy on the mar- ket; the efficiency measures they put in — to moderate the effects that I think will persist for a few years. ose effects will be less if we have a warm winter, more if we have a cold winter, for the next two, three or four years. But I think the longer-term picture is quite positive, because we are close to what is literally the cheap- est source of fuel in the world. e Marcellus Shale production of natural gas is cheaper than anywhere else in the world. I think in the long term, by which I mean four-plus years out, there's a very good and strong possibility we will be in an advantageous position. What I'm hoping for is that businesses, either in their board rooms in Maine or board rooms elsewhere, will see the contin- ued value of Maine as a place where people want to live and work and produce things. I'm hoping they don't give up and say, 'Oh, we're just going to take it some- place else.' I genuinely believe this is a two-, three- or four-year blip. So that's the underlying message. MB: Any advice to whoever succeeds you? TW: Read carefully, ask questions when they need to be asked and treat staff with the respect they deserve and make sure you press them for the infor- mation you need. I think it's also important to understand that very few things happen quickly in this industry. You've got to pay attention to the economic fundamentals and always step back and think, 'What are the effects going to be? What are the implications going to be?' You need to be fair, and perceived to be fair. You know, reasonable minds can differ, but you have to be sure that what you are saying is the expression of a reasonable mind. J a m e s M c C a r t h y , M a i n e b i z s e n i o r w r i t e r , c a n b e r e a c h e d a t j m c c a r t h y @ m a i n e b i z . b i z Thursday, January 15 8:00–11:00am DoubleTree by Hilton, South Portland Tickets are $25 per person and include a plated breakfast Join us for Five on the Future as we take a look at Maine's economy with a panel discussion featuring several Maine leaders. Plus, we will have a keynote address from Jeff Fuhrer of the Federal Reserve Bank. SponSored by For sponsorship info, contact Publisher Donna Brassard at 207.761.8379 x327 or donnab@mainebiz.biz For more information, or to register, visit mainebiz.biz / 5on or call 207.761.8379 x341 Jeffrey Fuhrer eVp and Senior policy Advisor, the Federal reserve bank of boston Wick Johnson Ceo, Kennebec Technologies Michelle Hood Ceo, eastern Maine Healthcare Systems Ellen Belknap president, SMrT Architects Adam Lee Chairman, Lee Auto Group it's true the cost curves are coming down for onshore wind power. But you also have to look at whether the cost curves are coming down for other energy sources as well.

• Cover