The Ministry of New and Renewable Energy (MNRE) has formulated three models for developing offshore wind energy projects, especially along the extreme southern and western shorelines of the country.

The Ministry has also issued calls for proposals to conduct surveys on identified offshore wind project sites under the newly formulated models.

Under the National Offshore Wind Energy Policy, 2015, the National Institute of Wind Energy (NIWE) was designated as the central agency responsible for steering the development of offshore wind projects in India.

NIWE conducted a thorough investigation and identified eight zones off the coasts of Tamil Nadu and Gujarat, with the potential for developing offshore wind projects.

Model A (VGF Model)

This approach will be applied to designated offshore wind zones, for which MNRE and NIWE have either conducted or proposed comprehensive assessments. Initially, the first phase of this model will encompass a portion of the identified Zone B3, spanning 365 square kilometers, corresponding to a capacity of 500 MW off the coast of Gujarat, along with another 500 MW off the coast of Tamil Nadu.

In conjunction with implementing agencies, MNRE will initiate the process of soliciting bids for procuring offshore wind power capacity within this framework. To ensure the attainment of a predetermined power tariff, essential central financial assistance (CFA) will be provided in the form of Viability Gap Funding (VGF).

Gujarat

MNRE will have lease arrangements for 35 years with the successful bidders, under which they must remit an annual base lease fee of ₹100,000 (~$1,203) per square kilometer, applicable throughout the lease duration.

Upon achieving success, the bidders who prevail will be expected to provide the necessary information to obtain the clearances pertinent to Stage II. Subsequent to this, the process of obtaining Stage II clearances, essential for the setup and operationalization of the offshore wind farm and related transmission infrastructure, will be initiated.

To establish a functional framework, MNRE will execute an offshore wind project concession agreement with the offshore wind power project developer. Within four years, the offshore wind power developer will be mandated to bring the project to fruition.

In terms of power distribution, the Solar Energy Corporation of India (SECI) will facilitate the marketing of generated power. An immediate subsequent power sale agreement will be executed with the state’s distribution company (DISCOM) in Gujarat, facilitating the procurement of power specifically from this project.

Tamil Nadu

A site with a capacity of 1 GW has been identified for the first proposed project. NIWE will carry out the survey within the identified site, and the bid for a 500 MW project will be floated within this site. The procedure for project development would be similar to the project development process in Gujarat.

Model B (Non-VGF Model with Exclusivity Over Seabed)

This approach will be applied to locations identified by NIWE. The proposed offshore wind sites within the designated zones will be delineated and subsequently assigned on a lease basis for a defined duration.

The execution of project development within these sites will be undertaken by potential developers without the provision of Central Financial Assistance (CFA). The electricity produced by these projects will be earmarked for internal consumption under open access arrangements, sold to entities through bilateral power purchase agreements (PPAs), or made available via power exchanges. Additionally, the government might issue calls for bids to procure power for DISCOMs based on tariffs after a two-year period.

Through a competitive selection procedure, MNRE will allocate specific offshore wind energy sites, as identified, to potential offshore wind power developers. This allocation will be established through an exclusive lease extending over two years, facilitating preliminary survey activities. The apportionment of seabed areas will be accomplished via a competitive bidding process.

Initially estimated at 14 GW, the overall offshore wind energy capacity will be unveiled in stages. The inaugural bid, encompassing 4 GW, is scheduled to be initiated on December 1, 2023, while the subsequent bid for 3 GW is anticipated to be introduced during the financial year 2024-25.”

Model C (Non-VGF Model without Exclusivity Over Seabed)

Within this framework, developers can identify offshore wind sites within the Exclusive Economic Zones (EEZs), excluding those sites designated under Model-A and Model-B, and subsequently undertake thorough examinations and surveys. The government will initiate the process of soliciting bids for project establishment and the allotment of seabed areas.

Developers who have conducted surveys of respective sites can also submit proposals for project development and offshore wind site allocation under this model. However, the actual development of projects within this zone will be undertaken by potential developers without the provision of CFA.

The indicative auction trajectory under the three models is given below:

Source: MNRE

 Connectivity with the Grid

The developer will be accountable for power transmission up to the offshore interconnection point. Infrastructure beyond this point, including the offshore substation and transmission facilities, will be established by the Central Transmission Utility (CTU).

The advantages of the waiver for the interstate transmission system (ISTS) charges will be applicable to projects that are commissioned until December 31, 2032.

Call for Proposal to Conduct Survey on Offshore Wind Project Leased Sites

The call for proposal is under Model B of the Strategy for Establishment of Offshore Wind Energy Projects. The projects will be developed without CFA on the identified offshore wind sites.

The first bid for 4 GW capacity will be floated on December 1, 2023, and bids for the other 3 GW capacity will be floated in FY 2024-25. Under this model, sites are proposed to be allocated for two years to conduct the survey.

Developers willing to conduct surveys on these sites may submit the application to NIWE. However, the leasing out of the seabed would only be through the competitive bidding process.

Call for Proposal for Surveys in Exclusive Economic Zones 

The call for proposal is under Model C of the Strategy for Establishment of Offshore Wind Energy Projects.

The developer may identify any site excluding sites existing under Model A and Model B.

The developer may participate in any offshore wind bids or allocation of the seabed, which may be floated in any one of the following methods:

• Bidding on lease or allocation fee or revenue sharing in case of projects for captive consumption, third-party sale, or sale through an exchange under open access mechanism.
• Tariff-based competitive bidding in case of power procurement by DISCOMS or central government or state governments.
• Any other transparent bidding mechanism identified by the government.

Developers must proposals to carry out offshore wind surveys within EEZs of the country under Model C. They must submit applications to NIWE seeking consent for the survey per the Offshore Wind Power Assessment, Studies, and Surveys guidelines.

Last month, NTPC Green Energy, a wholly-owned subsidiary of NTPC, invited expressions of interest from India-based or global offshore wind power companies to form a consortium to develop offshore wind power projects in India. NTPC Green Energy plans to collaborate with a partner company with knowledge and experience in offshore wind project development across the globe.

Earlier, MNRE had issued a draft tender to select wind power developers for leasing seabed areas to develop 4 GW of offshore wind power projects off the coast of Tamil Nadu.