Government Sanctions ₹7,453 Crore for First Offshore Wind Projects in Gujarat and Tamil Nadu, Aiming to Bolster Clean Energy Capacity
In a move signaling a significant shift towards renewable energy, the Indian government approved a ₹7,453 crore ($1 billion) investment for the country’s first-ever offshore wind projects. The initiative, announced after a cabinet meeting led by Prime Minister Narendra Modi, aims to harness India’s vast offshore wind potential and bolster its clean energy portfolio.
The funding will be divided into two parts: ₹6,853 crore ($920 million) allocated for installing 1 gigawatt (GW) of offshore wind power plants – 500 megawatts (MW) each off the coasts of Gujarat and Tamil Nadu – and ₹600 crore ($80 million) designated for upgrading port infrastructure to accommodate the logistical demands of these large-scale projects.
“This approval marks the establishment of India’s first offshore wind energy terminal,” said Union Minister Ashwini Vaishnaw, highlighting a key benefit of offshore wind farms – their ability to capture stronger, steadier winds further out at sea, leading to more continuous electricity generation.
The government anticipates the 1 GW project to generate roughly 3.72 billion units of renewable electricity annually, translating to a substantial reduction in carbon emissions. A critical aspect of the initiative is making offshore wind power financially viable for state-run power distribution companies. The central government’s funding aims to bridge the cost gap associated with offshore wind power generation.
Private developers chosen through a transparent bidding process will be responsible for constructing the wind farms. Power Grid Corporation of India (PGCIL) will oversee the construction of essential power transmission infrastructure, including offshore substations and underwater cables. The Ministry of New and Renewable Energy (MNRE) will play a central role in coordinating with various ministries to ensure smooth project execution.
This Viability Gap Funding (VGF) scheme aligns with India’s National Offshore Wind Energy Policy rolled out in 2015, which aims to tap into the nation’s immense offshore wind energy potential within its exclusive economic zone. “VGF support is crucial for reducing power generation costs and making offshore wind projects more attractive for distribution companies,” emphasized Vaishnaw.
India’s 7,600-kilometer coastline positions it well to become a major player in the offshore wind energy sector. Initial assessments suggest that Gujarat and Tamil Nadu alone have the potential to generate 36 GW and 35 GW of offshore wind power, respectively.
Further bolstering its commitment to clean energy diversification, the Solar Energy Corporation of India (SECI) recently invited bids for a massive 4 GW offshore wind project off the Tamil Nadu coast. The bidding process, which is open until mid-July, pertains to four 1 GW blocks offered on an open access basis through international competitive bidding. This approach allows developers to sell electricity directly to consumers, particularly those currently facing high electricity tariffs.
Offshore wind energy offers several advantages over its onshore counterpart. It eliminates limitations related to land availability and boasts significantly higher capacity utilization factors, reaching nearly 50% compared to 22-25% for onshore projects. Additionally, offshore wind turbines, with individual capacities of up to 15 MW, are considerably more powerful than their onshore equivalents.
This significant investment by the Indian government marks a promising step towards harnessing the potential of offshore wind energy and establishing India as a leader in clean energy production.