MNRE Invites Proposals For Offshore Wind Studies In Exclusive Economic Zone: Revised Framework Under Model B

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The Government of India, in its ongoing pursuit of renewable energy sources, has revised its National Offshore Wind Energy Policy 2015. The policy initially introduced on October 6, 2015, aims to accelerate the development of offshore wind power within India’s coastal boundaries, extending up to 200 nautical miles from the baseline, encompassing the nation’s Exclusive Economic Zone (EEZ).

Under this visionary policy, the Ministry of New & Renewable Energy (MNRE) holds the pivotal role of the Nodal Ministry, overseeing the strategic implementation of offshore wind energy projects. Meanwhile, the National Institute of Wind Energy (NIWE) serves as the Nodal Agency entrusted with facilitating the development of Offshore Wind Energy across the country.

A key component of this policy is “Model B,” which outlines a process by which the MNRE or the Nodal Agency will allocate specific offshore wind energy sites to prospective Offshore Wind Power Developers (OWPDs). These allocations come in the form of exclusive leases, granting OWPDs five years to conduct comprehensive studies and surveys, as well as to commence the setup of offshore wind energy projects. The lease period is open to extension on a case-by-case basis. OWPDs, in turn, bear the responsibility for the offtake of power generated from their offshore ventures.

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The allocation of seabed areas is conducted through a competitive bidding process featuring a two-envelope system. This entails a technical bid assessing bidders’ techno-financial capabilities and a financial bid determining lease rentals and site allocation fees. A notable feature is the minimum floor price set at ₹1 Lakh per square kilometer per year for the offshore sites in question.

OWPDs are mandated to submit Detailed Project Reports (DPRs) and enter into concession agreements with NIWE for project development and power sales, catering to various regimes such as open access, captive consumption, or third-party sales. NIWE assumes a critical role in monitoring project development activities throughout the lease period.

Moreover, the government retains the prerogative to invite bids for power procurement for distribution companies (DISCOMs) based on tariff structures, a move that could potentially further incentivize the offshore wind energy sector.

Once a project is commissioned, the lease is extended to cover its operational life and eventual decommissioning. OWPDs are required to fulfill the quoted lease rentals and site allocation fees from the lease agreement until the Commercial Operation Date (COD). Subsequently, they continue to pay lease fees, with a floor price fixed at ₹1 Lakh per square kilometer per year for the remainder of the operational period from the date of commissioning.

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The policy thoughtfully accommodates contingencies, permitting developers to exit the project development phase within the initial five-year lease period, subject to specific conditions such as the submission of study/survey data to NIWE and the forfeiture of submitted Bank Guarantees. Developers who meet the scheduled commissioning date may even be eligible for partial refunds of site allocation fees paid beyond the floor price.

This revised framework underlines India’s unwavering commitment to tapping into the immense potential of offshore wind energy, aligning with the nation’s broader renewable energy goals. The policy invites proposals from stakeholders eager to participate in this transformative journey towards a greener and sustainable energy future.

Please read the document below for more details.

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