MNRE Releases Updation of Strategy for Setting Up Offshore Wind Energy Projects in India
India has unveiled a strategic blueprint for offshore wind energy development, emphasizing collaboration between government agencies and prospective developers. By leveraging three different models, the growth of the wind energy sector will be accelerated, ensuring a sustainable and renewable energy future.
August 21, 2023. By Nivedita Ojha
The assessment of offshore wind potential was conducted in collaboration with the FOWIND (Facilitating Offshore Wind in India) consortium, leveraging factors such as wind resources and bathymetry.
To accelerate the development of offshore wind farms and ensure comprehensive growth, the strategy proposes three distinct models:
Model-A (VGF Model) : This model is designed for demarcated offshore wind zones where MNRE/NIWE has conducted or plans to conduct detailed studies. Initially, a portion of Zone B3 off the Gujarat coast (365 sq. km) and an equivalent site off the Tamil Nadu coast (0.5 GW each) will be considered in phase-1. MNRE will issue bids for the procurement of offshore wind power capacity under this model, with Viability Gap Funding (VGF) support to achieve predetermined power tariffs.
For Model-A, a single-bid two-stage process followed by an e-Reverse Auction (e-RA) will be adopted, with SECI handling the bidding process. The e-RA will be based on either tariff or the required VGF amount to make the project economically viable, all with predetermined tariffs.
Initial investigations for a 365 sq. km seabed area in Zone B3, Gulf of Khambhat, off the Gujarat coast, include lidar-based offshore wind resource assessment, geophysical and geotechnical investigations, Rapid EIA studies, and oceanographic data collection. These efforts will support the development of a 1.0 GW offshore wind project capacity.
Model-B (Non-VGF with Exclusivity during Study/Survey) :This model targets sites identified by NIWE within designated zones. These sites will be allocated on a lease basis for a fixed period, enabling project development by prospective developers without central financial assistance (CFA). The generated power can be used for captive consumption, sold through bilateral agreements, or via Power Exchanges. Benefits such as power evacuation infrastructure, waiver of transmission charges, Renewable Energy Credits, and Carbon Credit benefits will apply.
Model-B focuses on the allocation of offshore wind sites through leases with site exclusivity during the study/survey period, followed by project development without VGF support. MNRE or the designated agency will allocate sites for study/survey through competitive bidding. Successful bidders will be granted a two-year period to carry out necessary investigations. Post-study, they will enter into concession agreements and lease agreements for a 35-year period for project development. Clearances will be withdrawn upon lease expiration.
The first bid for 4.0 GW capacity is planned for December 2023, with additional bids to follow.
Model-C (Non-VGF without Exclusivity during Study/Survey): Under this model, developers can identify offshore wind sites within the EEZ, excluding those considered in Models A and B. The government will invite bids for project development and seabed allocation through various transparent mechanisms. Developers who have conducted studies may also submit proposals for site-specific bidding. Similar to Model B, project development will proceed without CFA, with applicable benefits determined by government policies.
Under Model-C, developers can select offshore wind sites within the EEZ, excluding those considered in Models A and B. They will submit proposals to NIWE for study/survey, with subsequent coordination for stage-1 and stage-2 clearances. After clearances, developers will enter into concession and lease agreements for project development, without CFA. The OWPD will commission the project within four years from the concessionaire agreement.
To sum up, India's strategic approach to offshore wind energy projects exemplifies a commitment to sustainable energy generation. These models provide a clear roadmap for developers, balancing government support with the imperative for economic viability. As the nation progresses towards its renewable energy goals, these offshore wind projects promise to be an integral part of its energy landscape. MNRE will periodically review this strategy to align with evolving needs and advancements in offshore wind energy technology.
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