Govt chalks out offshore wind bid timeline even as India’s power demand touches new high

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The ministries of power and new and renewable energy have chalked out a plan to bid out 37 gigawatts (GW) equivalent of offshore wind energy projects in the next eight years till 2029-30 amid India’s overall demand for electricity touching an all-time high on June 9.

India’s power demand hit an all-time high of 210.8 gigawatts (GW) on June 9, driven by a spike in demand from households amid an ongoing heat wave and a pick-up in industrial demand. India runs the majority of its electricity units on coal and the constrained supply of fuel has widened the gap between demand and supply of power.

To combat climate change and global warming, India has set an ambitious target of 500GW of renewable energy by 2030 at COP26. Of this 500GW, about 140GW is planned from wind energy. While India has a coastline of 7,600 km on three sides and has good prospects of harnessing offshore wind energy, there has not been much progress on this front and there are no operational offshore wind projects yet.

“In an unprecedented move, the nation's electricity demand on 9th June 2022 clocked an all-time high of 210793 MW at 1500 hours. Adding on to the record-breaking streak, on 8th June 2022, the nation's energy consumption also clocked a historic 4712 MU,” Union Minister for Power and New & Renewable Energy RK Singh said in a tweet.

The minister held a meeting on transmission planning for offshore wind energy projects in India, where after a detailed review, a timeline for these bids was decided.

In a separate statement, the minister said, the government will issue bids equivalent to a project capacity of 4 GW per year for a period of three years starting with the current fiscal 2022-23 for development off the coast of Tamil Nadu and Gujarat for sale of power through open access, captive use, bi-lateral and third party sale, and merchant sales. Subsequently, a project capacity of 5 GW will be bid out every year for a period of five years till 2029-30.

“The project capacity of 8 GW bid out in the first two years beginning FY22-23 will also be able to avail of the benefits of green attributes like carbon credits,” the statement said.

The statement said that during the meeting, transmission and evacuation infrastructure required for offshore wind projects of a total capacity of 10 GW off the coasts of Gujarat and Tamil Nadu, was discussed.

The Ministry of New & Renewable Energy, through its implementing agency, will issue the first bid in the next three – four months, for leasing out offshore wind energy blocks equivalent to 4.0 GW capacity off the coast of Tamil Nadu. The evacuation and transmission of power from offshore pooling substation to onshore transmission will be provided free of cost for all offshore wind capacities that will be bid out up to FY 29-30.

The bidding for the first 12 GW will be conducted on a single stage two envelope model wherein the bidders will be evaluated based on their techno-commercial capabilities and only the technically qualified bidders will proceed to financial evaluation. The financial evaluation will be based on quoted lease fee per sq km of sea bed area. The bidder offering the highest lease fee per sq km of sea bed area would be declared as the winner for allocation of the project, the statement said.