The Union Cabinet approved a viability gap funding (VGF) scheme totaling Rs 7,453 crore for one-gigawatt offshore wind energy projects in Gujarat and Tamil Nadu.
The VGF scheme aims to establish India's first offshore wind energy projects, according to I&B Minister Ashwini Vaishnaw, who briefed the media on the decisions made at the Cabinet meeting chaired by Prime Minister Narendra Modi.
The VGF scheme for offshore wind energy projects also includes an outlay of Rs 6,853 crore for wind energy project installation and commissioning (500 MW each off the coasts of Gujarat and Tamil Nadu), as well as a grant of Rs 600 crore for upgrading two ports to meet the logistics requirements of offshore wind energy projects.
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The successful commissioning of 1 GW offshore wind projects will generate approximately 3.72 billion units of renewable electricity per year, resulting in an annual reduction of 2.98 million tonnes of CO2 equivalent emissions over a 25-year period, according to an official release.
Furthermore, the scheme will not only jumpstart India's offshore wind energy development, but will also result in the establishment of necessary ecosystems to supplement the country's ocean-based economic activities, according to the statement.
According to the release, this ecosystem will initially support the development of 37 GW of offshore wind energy for an investment of around Rs 4,50,000 crore.
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The VGF scheme is a significant step towards implementing the 2015 National Offshore Wind Energy Policy, which aims to capitalise on India's vast offshore wind energy potential within its exclusive economic zone.
According to the release, the government's VGF support will reduce the cost of power from offshore wind projects, making them more affordable for DISCOMs to purchase.
While the projects will be developed by private developers chosen through a transparent bidding process, the power excavation infrastructure, including offshore substations, will be built by Power Grid Corporation of India Limited.
The Ministry of New and Renewable Energy, as the nodal ministry, will work with other Ministries/Departments to ensure the scheme's successful implementation.
Offshore wind energy project construction and operations necessitate the use of specialised port infrastructure capable of storing and moving heavy and large-scale equipment.
The Ministry of Ports, Shipping, and Waterways will support two ports in the country as part of the scheme to meet the needs of offshore wind development.
Offshore wind is a renewable energy source that has several advantages over onshore wind and solar projects, including increased adequacy and reliability, reduced storage requirements, and greater employment potential.
The development of the offshore wind sector will benefit the economy as a whole by attracting investments, developing indigenous manufacturing capabilities, creating job opportunities across the value chain, and developing offshore wind technology in the country, according to the release.
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This will also help India achieve its energy transition targets.
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