Govt Yet to Sanction VGF For India’s First 1000 MW Offshore Wind Tender

Siemens Energy supplies control system for offshore wind farm

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India’s highly anticipated tender, which calls for developers to build 1,000 MW of offshore wind energy capacity off the Gujarat coast of India, is currently awaiting viability gap funding (VGF sanction from the Ministry of Finance).

Offshore wind energy would cost around Rs 8 per kWhr today. It cannot be built unless the government provides VGF support.

Speaking at Windergy 2022, a conference-cum-exhibition event of the wind industry currently underway here, Prabir Kumar Dash, an official in the Ministry of New and Renewable Energy (MNRE), said that if the Ministry of Finance sanctions the VGF now, the bidding can happen this year.

BusinessLine was informed by him that MNRE had asked for Rs. 15,000 crore for VGF. This does not include the funding required for building the grid and for evacuating power.

In April, Power Minister RK Singh said that India will soon invite bids for 2,000 MW offshore wind energy projects.

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“Our journey is incomplete without offshore wind energy. We will bring bids for 1,000 MW in Gujarat and after that 1,000 MW in Tamil Nadu,” Singh said at Clean Energy Ministerial Meeting. The minister urged international investors to come forward and invest in offshore wind tenders.

Last year the Ministry has formulated a committee to finalize a roadmap for offshore wind development in the country, including upcoming offshore projects. Government has permitted Foreign Direct Investment (FDI) up to 100 percent under the automatic route for renewable energy projects, including offshore wind energy projects. The Union Ministry of New and Renewable Energy (MNRE) has set a target of installing offshore capacity of 30 GW by 2030.

The global energy industry is eagerly anticipating the opening of India’s offshore wind section. According to the World Bank, there is potential for 1,95,000 MW (1,000 MW fixed, 83,000 MW floating) with a coastline of 7,600km.

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