India set to launch first offshore wind tender, boosting renewable energy portfolio

The focus has primarily been on onshore wind energy due to challenges related to land availability and regulatory changes at the state level. However, with the increasing obstacles faced by onshore wind projects, India is now looking to accelerate the development of offshore wind projects.

To support the growth of offshore wind energy, the Indian government intends to provide financial assistance through viability gap funding (VGF) to make projects more attractive to developers. The Ministry has sought approval from the finance ministry for the VGF model, specifically for the initial batch of 1 GW projects.

The ultimate goal is to achieve a tariff rate of Rs 4 per unit for offshore wind power, although the current cost of setting up such projects necessitates financial support from the government.

Also read: Govt revamps auction norms, bans reverse bidding for wind energy projects.

MNRE Secretary BS Bhalla stated that the first phase of offshore wind projects will be located along the coasts of Tamil Nadu and Gujarat, with a combined potential of about 70 GW.

The government plans to issue seabed lease tenders for a trajectory of 37 GW by 2030. Both Tamil Nadu and Gujarat governments have shown interest in purchasing offshore wind power at a competitive tariff rate of Rs 4 per unit for the initial projects.

During the event, industry experts emphasized the importance of creating a substantial order pipeline volume to attract original equipment manufacturers (OEMs) to enter the offshore wind market in India.

Jan Willem Zwarteveen, CEO of Service India and Sri Lanka at Siemens Gamesa, explained that offshore wind projects require larger turbines, typically 15 MW, and become economically viable with a sufficient number of turbines.

Therefore, he suggested that any project below 750 MW may not be appealing as a first project and that multiple projects are needed to attract OEMs to consider market entry.

Mohit Bhargava, CEO of NTPC Renewable Energy Ltd (NTPC REL), highlighted that achieving offshore wind energy tariffs of Rs 4 or even Rs 7 per unit would be ambitious at present. He emphasized the need for adequate funding from the government to ensure that developers can deliver low tariffs.

Alok Kumar, Secretary of the Ministry of Power, proposed that MNRE establish a dedicated mission for offshore wind, similar to the green hydrogen mission.

He also recommended that MNRE set timelines and trajectory for offshore wind development until 2040 instead of just until 2030. Furthermore, he urged the Central Electricity Authority to consider offshore wind more extensively when projecting the country's future energy mix.

Also read: MC Interview | NTPC expects to add ‘significant’ renewable energy capacity in FY24: NTPCREL CEO.

The event also addressed challenges related to cable shortage for laying transmission lines for offshore wind projects. The government is actively working to resolve this issue, as stated by Alok Kumar.

In conclusion, India is gearing up to launch its first offshore wind seabed lease tender within the next few weeks. This initiative marks a significant step toward achieving the country's ambitious renewable energy targets and diversifying its wind energy portfolio.

By leveraging its vast coastline and addressing key challenges, India has the potential to emerge as a major player in the global offshore wind industry.