Despite its enormous potential, India has thus far lagged behind its global peers with no installed offshore wind capacity in the country despite the international market size reaching close to 75 GW. In India, just two of the nine coastal states – Gujarat and Tamil Nadu – have a combined offshore wind potential of 71 GW. India aims to install more than half of this capacity (37 GW) by 2030, as part of its overall non-fossil-fuel goal of 500 GW.
The government’s new funding scheme helps address this early inertia by including INR 6,853 crores (US$ 800 million) of viability gap funding (VGF) to incentivise the development of India’s first offshore wind energy projects, with the remaining amount allocated towards upgrading ports to manage the logistical requirements of these projects. This scheme not only marks the launch of offshore wind in India but is also expected to bring much needed private investment to a sector which developers have shown little interest in so far, due to operational challenges and offtake concerns due to high generation prices.
Nevertheless, there is a strong case for India to prioritize offshore wind projects. They deliver better reliability of electricity supply, even during peak hours, owing to faster wind speeds and higher capacity factors, compared to other renewable energy (RE) sources including onshore wind. Moreover, they aren’t much affected by the land constraints, which is a growing concern associated with RE projects in many states.
