India Approves $891 Million VGF Scheme For Its First-Ever Offshore Wind Energy Projects

The Union Cabinet, chaired by Prime Minister Shri Narendra Modi, has approved the Viability Gap Funding (VGF) initiative to establish the country’s first offshore wind energy projects.

The effort, worth Rs.7453 million, is a critical step in implementing the National Offshore Wind Energy Policy launched in 2015.

The VGF scheme has allocated Rs.6853 crore to install and commission 1 GW of offshore wind energy projects.

This includes two 500-MW projects to be developed off the shores of Gujarat and Tamil Nadu.

In addition, Rs.600 crore has been set aside for the upgrade of two ports to meet the logistical requirements of these offshore wind projects.

The investment seeks to reduce the high costs of offshore wind energy, making it more affordable for distribution companies (DISCOMs).

While private developers, chosen through a transparent bidding procedure, would establish the projects, the Power Grid Corporation of India Ltd (PGCIL) will build the essential power evacuation infrastructure, including offshore substations.

The Ministry of New and Renewable Energy will serve as the nodal ministry, liaising with other ministries and departments to guarantee the scheme’s successful implementation.

Offshore wind energy has advantages over onshore wind and solar installations, including increased adequacy and reliability, lower storage requirements, and a more extensive employment potential.

The growth of this sector is expected to benefit the entire economy, including attracting investments, developing indigenous manufacturing capabilities, providing job opportunities across the value chain, and increasing technical development for offshore wind in India.

The plan supports the Ministry of Ports, Shipping, and Waterways in modernizing two ports to accommodate the heavy and large-scale equipment required for offshore wind production.

This infrastructure improvement is critical for both these projects’ development and operational phases.

Once operational, the 1 GW offshore wind projects are estimated to generate roughly 3.72 billion units of renewable power annually, resulting in an annual decrease of 2.98 million tonnes of CO2 equivalent emissions over 25 years.

The initiative establishes India’s offshore wind energy sector and intends to build a strong ecosystem to support ocean-based economic activity and future offshore wind developments.

The development of an initial 37 GW of offshore wind energy is expected to cost roughly Rs. 4,50,000 crore.

Reference: PIB

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Source: Maritime Shipping News