The Union Cabinet on Wednesday approved a viability gap funding (VGF) scheme for offshore wind energy projects worth Rs 7,453 crore. This includes an outlay of Rs 6,853 crore for installation and commissioning of 1 gigawatt (GW) of offshore wind energy projects — 500 MW each off the coast of Gujarat and Tamil Nadu — and the grant of Rs 600 crore for upgradation of two ports to meet logistics requirements for offshore wind energy projects.
“The VGF scheme is a major step towards implementation of the National Offshore Wind Energy Policy, notified in 2015, with an aim to exploit the vast offshore wind energy potential that exists within the exclusive economic zone of India,” the government said.
The VGF support is expected to reduce the cost of power from offshore wind projects, making them viable for purchase by distribution companies. While private developers will build the projects, the Power Grid Corporation of India will construct the excavation infrastructure and offshore substations.
The successful commissioning of 1GW offshore wind projects will produce renewable electricity of about 3.72 billion units annually, the government said. This will result in annual reduction of 2.98 million tonne of CO2 equivalent emission for a period of 25 years. The scheme will support the development of initial 37 GW of offshore wind energy at an investment of about Rs 4,50,000 crore.