India's first-ever offshore wind projects to get ₹7453 crore Viability Gap Funding (VGF)

India's plans of developing 37 GW (gigawatt) of offshore wind energy at an investment of about ₹4,50,000 crore has kickstarted with the Union Cabinet approving a Viability Gap Funding (VGF) scheme worth ₹7453 crore for the first 1000 MW (1 GW).

This includes ₹6853 crore for the installation and commissioning of one GW of offshore wind energy projects (500 MW each off the coast of Gujarat and Tamil Nadu), the first-ever offshore wind energy projects in India.

Though India notified a National Offshore Wind Energy Policy in 2015, offshore wind energy projects were not coming up due to non-viability of offshore wind projects as capital costs are more than double when compared to onshore wind projects. The VGF support from the Government is to reduce the cost of power from offshore wind projects and make them viable for purchase by power distribution companies (DISCOMs).

Unlike onshore wind energy projects, offshore projects may require 6-7 years to set up as they involve feasibility studies, challenges in setting up huge turbines in the seas far off the coast, power evacuation etc.  Estimates are 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.

Construction of offshore wind energy projects and its operations also require specific port infrastructure, which can handle storage and movement of heavy and large dimension equipment. Under the scheme, a grant of ₹600 crore has been earmarked for the upgradation of two ports in the country. It will be supported by the Ministry of Ports, Shipping and Waterways to meet logistics requirements for offshore wind energy projects.

Global Wind Energy Council (GWEC) countries like Japan, South Korea, India and Brazil have the potential to harness and accelerate offshore wind energy.  Various estimates say the world will need 380 GW of offshore wind by 2030 and 2,000 GW of offshore wind by 2050 to meet the net zero targets. Currently, global offshore wind installations are just over 75GW.