India’s Union Cabinet has approved the viability gap funding scheme for offshore wind energy projects totalling $892.3m.
This includes $820.5m for the installation and commissioning of 1GW of offshore wind energy projects – 500MW each off the coast of Gujarat and Tamil Nadu – and a grant of $71.8m for upgrading two ports to meet logistics requirements for offshore wind energy projects.
The support from the funding scheme will reduce the cost of power from offshore wind projects and make them viable for purchase by distribution companies.
While the projects will be established by private developers selected via a transparent bidding process, the power infrastructure, including the offshore substations, will be constructed by the Power Grid Corporation of India Ltd (PGCIL).
As the construction of offshore wind energy projects requires specific port infrastructure, which can handle storage and movement of heavy and large equipment, the scheme will help two ports in the country meet the requirements of offshore wind development.
According to the Indian government, the successful commissioning of 1GW offshore wind projects will produce renewable electricity of about 3.72bn units annually, which will result in an annual reduction of 2.98m tonnes of CO2 equivalent emission for 25 years.
“This scheme will not only kick start the offshore wind energy development in India but also lead to the creation of a required ecosystem in the country to supplement its ocean-based economic activities. This ecosystem will support the development of an initial 37GW of offshore wind energy at an investment of about Rs.4,50,000 crore ($53.9bn),” the government explained.
Financial agency Moody’s has calculated that India would need to spend about $385bn to achieve the country’s target of 500GW of renewable energy capacity by 2030, or an annual addition of 44GW annually.
