With roughly 42 GW of installed wind power capacity as of November 2022, India is one of the leading nations in terms of wind power deployments. Much older and more mature than the solar power segment, wind power dominated India’s renewable energy mix for years. However, of late, the segment has witnessed a significant slowdown in capacity addition and lags far behind solar power, which has an installed capacity of over 61 GW. Land acquisition-related concerns along with the exhaustion of many wind-rich sites, protracted approval processes, grid connectivity issues and the switch from a feed-in tariff to an auction-based regime are the primary reasons for this slowdown. This year too, only 1.5 GW of new wind power capacity has been deployed between April and November 2022.
At a time when onshore wind deployments are experiencing a lull and the country is racing to achieve its clean energy goals, the offshore wind power segment is emerging as a possible solution. India currently has no offshore wind capacity deployed, but there is a high degree of interest from stakeholders owing to the many benefits of this technology. Offshore wind power is deployed off the coast where wind speeds are much higher and thus, significantly higher volumes of wind energy generation can be achieved. For this reason, offshore wind turbines are much larger in capacity as compared to onshore wind turbines. For instance, commercially available offshore wind turbines normally range from 8 MW to 14 MW against just 3-4 MW for onshore wind turbines. Moreover, as offshore wind projects are deployed in the sea, they are free from land acquisition challenges. Surrounded by water on three sides, India has a long coastline of about 7,600 km, making it a good candidate for offshore wind energy deployment.
However, offshore wind projects come with their own challenges, including significantly high project costs and long gestation periods, as well as logistics, power evacuation, construction and O&M issues at sea. Despite this, it is believed that offshore wind power costs will decline with economies of scale and the energy and efficiency gains will outshine any drawbacks. This has been the experience across the globe and the same trend is expected in India as well. Notably, despite the high initial project costs and long project development timelines, the global offshore market has grown by 36 per cent per year on average in the past decade, according to the Global Wind Energy Council (GWEC), to reach 56 GW of installed capacity as of end 2021. The GWEC report also identifies India as a key market to watch in the offshore wind energy space, especially with the recent focus on developing the country’s capabilities in this area. The government, moreover, has set a target for deploying 30 GW of offshore wind capacity by 2030.
This article highlights the potential for offshore wind development in India along with the initial steps taken to help realise this huge, untapped opportunity…
Potential mapping and assessments
As the offshore wind segment is at a nascent stage in India, various studies have been carried out or are under way to determine the potential for offshore wind development in India. Based on preliminary assessment data from studies done by the National Institute of Wind Energy (NIWE) in collaboration with various multilateral agencies, eight zones have been identified in both Gujarat and Tamil Nadu for offshore wind exploration and development. Mesoscale mapping and initial surveys in these identified zones suggest approximately 36 GW of offshore wind potential off the coast of Gujarat and 31 GW off the coast of Tamil Nadu. Thus, roughly 70 GW of offshore wind potential has already been identified through initial studies, indicating significant scope for clean energy development.
In addition to the resource assessment work being carried out by government agencies, the NIWE had, in September 2018, issued “Guidelines for Offshore Wind Power Assessment Studies and Surveys” to enable private investors to carry out offshore wind resource assessments. Further, since actual ground measurements are required for accurate potential estimation, light detection and ranging (LiDAR) equipment is planned to be deployed at the identified zones off the coast of Gujarat and Tamil Nadu. The NIWE had already commissioned one LiDAR in 2017 off the coast of Gujarat nearly 25 km from Pipavav port and analysed two years’ data collected from this equipment. Based on this analysis, which has been validated by a ground-mounted wind monitoring station at Jafrabad, the annual average wind speed at the site is observed to be 7.52 metres per second at 100 metres hub height. Two more such systems are planned to be deployed off the coast of Gujarat.
Apart from wind data, offshore wind project development requires careful analysis of the site conditions for which accurate oceanographic, geophysical and geotechnical data is needed. In this regard, geophysical surveys of 365 sq km for 1 GW of project capacity have been completed along with geotechnical studies for five bore holes in the Gulf of Khambhat, off the Gujarat coast. A rapid environment impact assessment study has also been conducted through the National Institute of Oceanography for this location.
The Ministry of New and Renewable Energy (MNRE) has allocated the required budget to the NIWE for the installation of three LiDARs off the coast of Tamil Nadu in the Gulf of Mannar. Following this, in November 2022, the NIWE issued a global tender for the supply, installation and commissioning of an integrated floating buoy for mounting offshore LiDAR equipment along with meteorological and oceanographic sensors at three locations in the Gulf of Mannar. Thus, resource assessment work through LiDAR is expected to pick up speed in the coming months.
Policy initiatives so far
India has been an early mover in the offshore wind space as far as policy is concerned. The government had notified the National Offshore Wind Energy Policy way back in 2015, providing the basic framework for developing offshore wind. The policy authorises the NIWE to serve as the nodal agency for the development of offshore wind energy and to conduct the auction of offshore wind farms. According to the policy, offshore wind blocks will be leased out through an international competitive bidding mechanism. In addition, the policy directs the NIWE to be the sole facilitator for obtaining clearances and no-objection certificates for such offshore blocks.
Interestingly, in 2018, the NIWE had invited expressions of interest (EoIs) for the development of a 1 GW offshore wind energy project in the Gulf of Khambhat. The purpose was to shortlist prospective offshore wind power developers and assess India’s readiness for offshore wind development and boost activity in this area. While this first ever large-scale offshore wind power tender received a good response with leading global offshore wind players and 35 bidders submitting EoIs, the project did not ultimately progress to the implementation stage owing to factors such as high capital costs, lack of incentives and inadequate data.
The government has conducted several stakeholder consultation meetings to address and analyse the different aspects of offshore wind energy development. Some demonstration and feasibility projects have also been launched with the help of international agencies. For instance, the Facilitating Offshore Wind Energy in India (FOWIND) project was implemented by a consortium led by the GWEC with support from the European Union from December 2013 to March 2018. It focused on the identification of potential zones for offshore wind development in Gujarat and Tamil Nadu based on preliminary resource assessments. Similarly, the First Offshore Wind Power project in India (FOWPI) was implemented between 2016 and 2019 by a consortium led by COWI and supported by the European Union. The aim of this project was to provide aid up to the pre-financial investment decision stage as well as help in capacity building of the Indian industry. Both these projects have been instrumental in India’s offshore wind journey, especially with respect to the launch of the policy and EoIs as well as resource assessments.
Similar collaborative programmes are under way today as well, including a joint declaration of intent between Renewable Energy Catapult and the NIWE for supporting the Indian and UK offshore wind industries. Further, as part of an MoU between India and Denmark, the Centre of Excellence for Offshore Wind and Renewable Energy was launched in September 2021 to develop cost-effective offshore wind in India and mobilise investment for the same. These initiatives are expected to significantly help in addressing the bottlenecks in offshore wind capability development in India through dialogue, knowledge sharing and raising finance.
While these past developments have been important in setting the context for India’s offshore wind development journey, they have not been effective in actually implementing a large-scale commercial offshore wind project. However, the landmark interventions witnessed in the offshore wind space in 2022 may finally lead to the start of project development activity in this space. The MNRE has explored various approaches for competitive bidding and project implementation in the offshore wind segment and, after much deliberation, the government announced an offshore wind tendering trajectory in June 2022. According to this bidding plan, 4 GW of capacity will be auctioned every year for a period of three years starting 2022-23. These offshore wind projects will be developed off the coast of Tamil Nadu and Gujarat. At the end of these three years, 5 GW of capacity will be tendered each year till 2029-30. Thus, according to this trajectory, 37 GW of offshore wind capacity is planned to be bid by 2029-30, which provides clear visibility to interested parties, both domestic and global, regarding project development. As an incentive for developers, the evacuation and transmission of power from offshore pooling substations to onshore transmission will be free for all offshore wind capacities that are bid till 2029-30.
Shortly after the announcement of this broad tender trajectory, in July 2022, the MNRE released a strategy paper for the establishment of offshore wind energy projects, which envisages three models or approaches for project development. According to the defined strategy, Model 1 will be followed for sites for which surveys have been conducted by the NIWE or other government entities. Model 2 will be applicable to sites where the surveys are to be conducted by prospective developers selected through the bidding process. These developers would not have any exclusivity on the seabed. Model 3 will also be followed for sites for which surveys will be conducted by prospective developers, but the developers will have exclusivity on the seabed and power sale will be done through bilateral agreements or be used for captive consumption or be undertaken on a power exchange basis. In addition to defining these different models, the paper presents an indicative auction trajectory for each model to streamline offshore wind power development.
Following these two important developments, the MNRE finally released a draft tender document in November 2022 to lease seabed blocks off the coast of Tamil Nadu for surveying and developing offshore wind energy projects with a total capacity of 4 GW. These developers will be chosen through an international competitive bidding process and the NIWE will be the tendering agency. The winning bidders will be responsible for the required surveys and investigations, establishing of the offshore wind power projects as well as grid connectivity and long-term open access to the grid. The power produced from these offshore wind projects will be consumed in captive mode or be sold through open access, bilateral, third-party, or merchant sale modes. The selected developers will sign a long-term lease deed agreement for 35 years. Although the tender document is still at the draft stage and is under stakeholder consultation, it clearly is a big milestone for India’s offshore wind segment. Once finalised, this tender and the ensuing bidding will lead to the allocation of a massive 4 GW of offshore wind capacity and put India on the global offshore wind map.
Simultaneously, the government is focusing on other aspects of offshore wind development. According to a recent MNRE press note, a viability gap funding scheme of Rs 142,830 million is being considered for the initial 3 GW of offshore wind energy projects and has been sent for approval to the Ministry of Finance. Further, the Draft Offshore Wind Energy Lease Rules, 2022 have been drafted and sent for legal vetting, and draft contractual documents are being circulated for stakeholders’ consultation. Clearly, various aspects relating to offshore wind power development including policies and regulations, financing, tendering and contracts are being considered to ensure that project implementation and power procurement take place in a streamlined manner. Grid availability still remains a key concern. The recent Central Electricity Authority report, “Transmission System for Integration of over 500 GW RE Capacity by 2030”, mentions only 10 GW of planned transmission capacity development for offshore wind projects by 2030, while the target is 30 GW of offshore wind. This issue needs to be quickly addressed and the on-ground implementation needs to be in sync with the planning.
India’s offshore wind power segment is finally getting the attention it deserves, not only from the government and bilateral agencies but also from prospective developers. A case in point is the Oil and Natural Gas Corporation and NTPC Limited signing an MoU to jointly explore offshore wind prospects. Tata Power Renewable Energy too is collaborating with Germany-based RWE Renewables to jointly develop offshore wind projects. Another global player, ENGIE is actively looking at India’s offshore wind market through a 50:50 joint venture with EDPR called OceanWinds. Thus, there is growing interest around developing India’s offshore wind potential through mega projects.
In conclusion, offshore wind can be an important contributor to achieving India’s clean energy goals. However, it is critical that the key bottlenecks are removed quickly and the final tender released soon so as to not lose the current momentum.