The Union Cabinet has approved the Viability Gap Funding (VGF) scheme for offshore wind energy projects.
The total outlay of the project is Rs.7453 crore. This includes:
• Rs.6853 crore for installation and commissioning of 1 GW of projects
• 500 MW each off the coast of Gujarat and Tamil Nadu
• Grant of Rs.600 crore for upgradation of two ports to meet logistics requirements
Benefits:
The successful commissioning of 1 GW offshore wind projects will produce renewable electricity of about 3.72 billion units annually.
• This will result in annual reduction of 2.98 million ton of CO2 equivalent emission for a period of 25 years.
• This scheme will not only kick start the offshore wind energy development in India but also lead to creation of required ecosystem in the country to supplement its ocean-based economic activities.
• The ecosystem will support the development of initial 37 GW of offshore wind energy at an investment of about Rs. 4,50,000 crore.
• The development will lead to economy-wide benefits by:
i. attracting investments
ii. development of indigenous manufacturing capabilities
iii. creation of employment opportunities across the value chain
iv. technology development for offshore wind in the country.
The process:
The VGF support from the Government will reduce the cost of power from offshore wind projects and make them viable for purchase by DISCOMs.
• The projects will be established by private developers selected through a transparent bidding process.
• The power excavation infrastructure, including the offshore substations, will be constructed by Power Grid Corporation of India Ltd (PGCIL).
• Ministry of New and Renewable Energy, as the nodal ministry, will coordinate with various Ministries/Departments to ensure successful implementation of the scheme.
Infrastructure:
Construction of the energy projects and its operations require specific port infrastructure. This can handle storage and movement of heavy and large dimension equipment. Under the scheme, two ports in the country will be supported by Ministry of Ports, Shipping and Waterways to meet the requirements of offshore wind development.
The VGF scheme is a major step towards implementation of the National Offshore Wind Energy Policy notified in 2015 to exploit the vast offshore wind energy potential that exists within the exclusive economic zone of India.
This will also contribute towards achieving India’s energy transition targets.