According to a new report released today by MEC+ and QVARTZ, Offshore wind can fit in the energy mix of India as the need for higher-priced power is expected to emerge in the country by 2030. The available options for meeting India’s doubling demand will fall short by nearly 50 GW. India would have the option to fire expensive coal power to meet this demand or switch to a greener alternative of offshore wind. While coal-based power prices increase to reach EUR 65/MWh in 2030, offshore wind costs can decline from current high levels to reach that figure.
The report highlights that an emerging need for expensive power (~EUR 65/MWh) combined with ambitious targets and a conducive tender design are expected to promote offshore wind in the country. However, misplaced pricing expectations at levels of land-based renewables, local resource and siting conditions being dis-similar to that in Europe, ambiguous approval process, and lack of indigenized supply chain create hurdles for uptake.
Participants can leverage existing local capabilities and their global expertise to deliver cost-competitive OW projects in India. The report deep dives on all supply chain players and observes that India has access to supply chain and has experience within OW adjacent sectors – onshore wind and O&G. No fundamental bottleneck is expected in the availability of the supply chain for OW deployment. Nonetheless, investments would be required to scale existing capabilities.
Additionally, the report recommends that prospective participants must build comfort with quality along with Health Safety & Environment (HSE) practices of the local supply chain and modify practices as per the Indian supply chain cost structure.
Sidharth Jain, Founder and CEO at MEC+ commented: “OW in India is attractive but has practical challenges that can be resolved to make it a scalable opportunity. Foreign players entering the market should take caution of the pricing dynamics, OW resource variation between EU and India, and the difference needed in the business practices to meet those price targets.”