India Launches First Offshore Wind Projects with Rs 7453 Crore Funding Boost

By siliconindia  |  Wednesday, 26 June 2024, 08:48:27 AM IST

India Launches First Offshore Wind Projects with Rs 7453 Crore Funding Boost
India has launched its ambitious plan to develop 37 GW of offshore wind energy, with an investment of approximately Rs 4,50,000 crore. The Union Cabinet has approved a Viability Gap Funding (VGF) scheme worth Rs 7453 crore for the first 1000 MW (1 GW) of this initiative. This includes Rs 6853 crore dedicated to the installation and commissioning of one GW of offshore wind energy projects, with 500 MW each off the coasts of Gujarat and Tamil Nadu, marking the country's first-ever offshore wind energy projects.
Although India announced a National Offshore Wind Energy Policy in 2015, offshore wind energy projects had not progressed due to their non-viability, as capital costs are more than double those of onshore wind projects. The Government's VGF support aims to reduce the cost of power from offshore wind projects, making them viable for purchase by power distribution companies (DISCOMs).
Unlike onshore wind energy projects, offshore projects may take 6-7 years to set up due to the need for feasibility studies, challenges in installing large turbines in the sea far from the coast, and power evacuation issues. It is estimated that India can harness about 70 GW of offshore wind energy off the coasts of Gujarat and Tamil Nadu alone.
While private developers will establish the projects selected through a bidding process, the power excavation infrastructure, including the offshore substations, will be constructed by Power Grid Corporation of India Ltd (PGCIL). Ministry of New and Renewable Energy will implement the scheme. Early this year, the Solar Energy Corporation of India issued 'Request for Selection (RfS) bids for allocation of 'Sea-bed Lease Rights' for 4000 MW offshore wind power projects, with a deadline of 2nd May 2024. 
The construction and operation of offshore wind energy projects require specialized port infrastructure capable of handling the storage and transportation of heavy and large equipment. Under the scheme, a grant of Rs 600 crore has been allocated for upgrading two ports in the country. The Ministry of Ports, Shipping, and Waterways will support this initiative to meet the logistical needs of offshore wind energy projects.
According to the Global Wind Energy Council (GWEC), countries such as Japan, South Korea, India, and Brazil have significant potential to harness and accelerate offshore wind energy. Estimates indicate that the world will need 380 GW of offshore wind energy by 2030 and 2,000 GW by 2050 to achieve net-zero targets. At present, global offshore wind installations total just over 75 GW.

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