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In a pivotal announcement during her interim Budget 2024 speech, Finance Minister Nirmala Sitharaman declared that the Indian government is set to extend Viability Gap Funding (VGF) for the development of 1 gigawatt (GW) offshore wind energy. This strategic move is part of India’s overarching objective to establish 500 GW of renewable energy capacity by 2030. In this pursuit, the nation plans to harness its expansive coastline, earmarking 10 GW for offshore wind capacity.
The Finance Minister highlighted the plan to allocate VGF for two key sites off the coasts of Gujarat and Tamil Nadu. While offshore wind projects offer heightened efficiency in power generation due to the absence of obstructions, the technology involved is intricate and costly, warranting essential support from the Central government.
In a recent development, the Indian government has invited bids for the development of 4 GW offshore wind energy, divided into four blocks of 1 GW each. These bids, on an open access basis, will facilitate the creation of offshore wind power projects off the coast of Tamil Nadu through international competitive bidding. Unlike VGF-supported projects, these open access bids require developers to establish 1 GW offshore wind energy capacity and directly sell electricity to consumers, predominantly high-tariff industries.
This initiative, overseen by the Solar Energy Corporation of India (SECI), positions India as a global leader in renewable energy. With the advantages of offshore wind, including the elimination of land constraints, higher Capacity Utilization Function (CUF), and increased turbine efficiencies, the country is poised to elevate its renewable energy journey to new heights. The bids, compliant with environmental clearances, signify a groundbreaking step in India’s commitment to sustainable energy solutions.
