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India’s first, much-praised wind farm tender awaiting approval from Finance Ministry

India's first, much-praised wind farm tender awaiting approval from Finance Ministry
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India’s first, much-praised wind farm tender awaiting approval from Finance Ministry.

The Ministry of Finance has yet to approve viability gap funding (VGF) for India’s much-publicized tender to build 1,000 MW of offshore wind capacity off the Gujarat coast. Offshore wind is inherently expensive; at today’s prices, it would cost at least ₹8 per kWhr. As a result, it will not be possible to implement it unless the government provides VGF support.

Speaking at Windergy 2022, a wind industry conference and exhibition currently taking place here, Prabir Kumar Dash, an official from the Ministry of New and Renewable Energy (MNRE), said that if the Ministry of Finance approves the VGF now, the bidding can take place this year.

He later revealed that MNRE has requested ₹15,000 crore for VGF, not including the funds required for grid construction and power evacuation. Also Read | India eliminate stubble burning issue; bio-enzyme, breaks straw, converts into fertilizer.

Taking advantage of enormous potential

The global energy industry is looking forward to India’s offshore wind segment opening up. According to a World Bank report, the potential is estimated to be 1,95,000 MW (1,12,000 MW fixed and 83,000 MW floating) with a coastline of 7,600 km.

The Indian government announced a National Offshore Wind Energy Policy in October 2015, with a goal of 5,000 MW of installations by 2022 and 30,000 MW by 2030.

A senior MNRE official told this correspondent in 2018 that the bidding was awaiting ‘just one clearance.’ At the conference, this issue was brought up. However, Dash denied any undue delay, claiming that offshore wind is complicated and time-consuming, pointing out that even the United States only has seven offshore turbines after 13 years of deliberation.

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Other speakers pointed out that 1,40,000 MW of wind was included in India’s grand ambition of building 5,00,000 MW of renewable energy capacity by 2030. The country currently has a little more than 40,000 MW of installed capacity, but half of that will need to be scrapped by 2030 because it has reached the end of its useful life.

In the next eight years, India will need to build 1,20,000 MW of wind power capacity. This will be impossible without a significant contribution from offshore wind.