India awards $890 million for 1GW of offshore wind projects

The country’s Press Information Bureau (PIB) said on 19 June that the ‘Union’ coalition cabinet led by prime minister Narendra Modi had approved funds of around INR 74 billion or around $890 million for the projects under the country’s ‘viability gap’ funding (VGF) scheme. 

The funding aims to help India’s government pursue its target of awarding leases for 37GW of offshore wind capacity by the end of the decade under its national offshore wind energy policy. 

“The VGF support from the government will reduce the cost of power from offshore wind projects and make them viable for purchase by [distribution companies],” the bureau stated. 

“While the projects will be established by private developers selected through a transparent bidding process, the power excavation infrastructure, including the offshore substations, will be constructed by [state transmission company] Power Grid Corporation of India,” it added. 

India has set ambitious targets to roll out renewable energy to help to meet its growing electricity demand of an expected 500GW by 2030, with wind power tipped for one fifth of this capacity.   

However, the country’s energy system relies heavily on domestic coal and imported crude oil and natural gas, and the International Energy Agency (IEA) expects India to soon overtake China as the world’s top coal importer.

Simon Engfred Schlichting, senior research analyst and regional lead for the Asia Pacific region at offshore wind intelligence company Aegir Insights, told Windpower Monthly earlier this month that there remains a lack of clarity in India’s offshore wind plans regarding timelines, permitting, port and grid infrastructure, and the ‘open door’ route whereby developers nominate sites. 

The government nevertheless said the new funds would help kickstart the industry in the country. 

“This scheme will not only kick start the offshore wind energy development in India but also lead to creation of required ecosystem in the country to supplement its ocean based economic activities,” the PIB stated.