Cabinet Clears Rs 7,453-Crore Funding For Offshore Wind Projects In Gujarat, Tamil Nadu

The government has approved an infusion of Rs 7,453 crore for offshore wind energy projects off the coasts of Gujarat and Tamil Nadu. This funding includes Rs 6,853 crore allocated for installing and commissioning 500-megawatt projects in each state, along with a Rs 600 crore grant for upgrading two ports to meet logistical needs for these projects.

Union Minister Ashwini Vaishnav confirmed the decision after a Cabinet meeting chaired by Prime Minister Narendra Modi, noting that this approval marks the establishment of India's first offshore wind energy terminal. These terminals, set up in the sea away from the shores, ensure continuous wind availability throughout the year.

The government expects the successful commissioning of 1 GW offshore wind projects to generate approximately 3.72 billion units of renewable electricity annually, significantly reducing carbon emissions.

This move is aimed at making offshore wind projects financially viable for state electricity distribution companies by lowering power generation costs through Union government funding support.

Private developers selected via transparent bidding will undertake project setup, while Power Grid Corp. will manage construction of necessary power evacuation infrastructure such as offshore substations and undersea cables. The Ministry of New and Renewable Energy will coordinate across various ministries to ensure effective implementation.

The Viability Gap Funding scheme aligns with the National Offshore Wind Energy Policy introduced in 2015, which aims to harness India’s extensive wind energy potential within its exclusive economic zone. Vaishnav highlighted that VGF support is crucial for reducing power generation costs and enhancing financial viability for distribution companies.

India boasts a 7,600-km coastline with substantial offshore wind energy potential. Preliminary assessments indicate Gujarat and Tamil Nadu alone could support 36 GW and 35 GW of offshore wind energy respectively.

Recently, the Solar Energy Corporation of India invited bids for a 4,000 MW offshore wind project off the Tamil Nadu coast, underlining India's commitment to expanding renewable energy sources.

The bidding process, open until July 10 for soft copies and July 12 for hard copies, involves four blocks of 1 GW each on an open access basis through international competitive bidding. This allows developers to sell electricity directly to consumers under the open access regime, targeting entities currently in high-tariff bands.

Offshore wind energy offers advantages such as eliminating land availability constraints and achieving higher capacity utilization functions, nearing 50% compared to 22-25% for onshore wind projects. Offshore turbines' efficiencies, with each turbine capable of 15 MW, exceed those of onshore counterparts.