The Indian government has sanctioned the viability gap funding (VGF) scheme for offshore wind energy projects with a total budget of Rs 74.53 billion. This includes Rs 68.53 billion allocated for the installation and commissioning of 1,000 MW of offshore wind energy projects. This 1 GW encompasses 500 MW each off the coasts of the states of Gujarat and Tamil Nadu. Additionally, Rs 6 billion has been earmarked for the enhancement of two ports to fulfill logistics needs for offshore wind energy projects.
Private developers chosen through a transparent bidding process will establish the projects, while Power Grid Corporation of India Limited will construct the power excavation infrastructure, including offshore substations. The Ministry of New and Renewable Energy, as the nodal ministry, will collaborate with various ministries/departments to ensure the scheme’s effective implementation. As part of the scheme, the Ministry of Ports, Shipping, and Waterways will provide support to two ports in the country to meet the needs of offshore wind development.
This scheme will initiate offshore wind energy development in India and foster the creation of a necessary ecosystem to enhance its ocean-based economic activities. This ecosystem will facilitate the establishment of an initial 37 GW of offshore wind energy with an investment of approximately Rs 4,500 billion.
REGlobal’s Views: India has had an offshore wind policy since 2015, and several policy initiatives have also been taken to attract investors and developers. However, there has no commercial activity yet. This VGF scheme is expected to give a kick-start to the segment and help in finally getting the initial projects off ground.
