Reading Time: 2 minutes
The Central Government, in the exercise of powers bestowed by Section 15 of the Territorial Waters, Continental Shelf, Exclusive Economic Zones and Other Maritime Zones Act, 1976 (80 of 1976), has introduced the Offshore Wind Energy Lease Rules, 2023. These rules are aimed at regulating the grant of leases for offshore areas for wind energy projects. They are set to be enforced from the date of their publication in the Official Gazette.
Under these rules, the term “Offshore Wind Energy Project” refers to a comprehensive system that includes wind turbines, offshore pooling substations, an array of offshore cables, and power generating systems from renewable sources on offshore platforms. The lease for offshore areas within the Exclusive Economic Zone for such projects will be granted by the Central Government after identifying suitable areas based on wind resource assessment and marine spatial planning.
To ensure a streamlined process, the Central Government may engage the services of the National Institute of Wind Energy. However, the Lessee, the entity or individual to whom the lease is granted, must obtain clearances from various ministries, including Defence, Home Affairs, External Affairs, Environment, Forest and Climate Change, Department of Space, and Ports, Shipping, and Waterways before the lease is granted.
The Lessee will agree with the Central Government, outlining the terms and conditions of the lease. The rights of the Lessee within the lease area include exclusive rights to carry out activities related to offshore wind energy and transmission. They also have the right to restrict certain activities within the Designated Lease Areas for the construction and operation of the offshore wind farm.
The Designated Lease Areas will vary during different phases, such as measurement and exploration, construction, and operation and maintenance. The Lessee is prohibited from engaging in activities unrelated to offshore wind power generation and subleasing any part of the lease without approval from the Central Government.
The lease period is specified, with an initial three-year period for resource measurement and related studies, extendable for two additional years. After this period, the lease can be extended for thirty-five years for the construction and operation of offshore wind energy projects, subject to functional viability and safety considerations.
Financial obligations include a refundable security deposit and a yearly lease fee, with the Lessee allowed to relinquish the lease area under certain conditions. In emergencies such as natural disasters or civil unrest, the Central Government retains the right of pre-emption for power generation from these projects.
The Lessee is responsible for maintaining equipment, infrastructure, and wind turbines in good condition, complying with technical standards, and decommissioning the project after the lease period. Dispute resolution mechanisms involve amicable resolutions and arbitration if necessary, following the provisions of the Arbitration and Conciliation Act, 1996. In conclusion, the Offshore Wind Energy Lease Rules, 2023, provide a comprehensive framework for the regulation and leasing of offshore areas for wind energy projects, contributing to the country’s renewable energy goals.
Please view the document below for more details.
