India’s Offshore Wind Energy Ambitions is seeing hurdles
In recent years, India has made significant strides in developing offshore wind energy. The government has recognized the potential of this renewable resource and is taking steps to harness it. A key milestone in this journey was the approval of an $821 million Viability Gap Funding (VGF) program in June. This initiative aims to incentivize the establishment of the first 1 gigawatt (GW) of offshore wind capacity. However, despite these efforts, a recent report indicates that India still faces challenges in meeting its ambitious goal of 37 GW of offshore wind capacity by 2030.
Challenges in Achieving Offshore Wind Capacity Goals
A report by the International Institute for Sustainable Development (IISD) and the Center for Study of Science, Technology and Policy (CSTEP) highlights the hurdles India must overcome to make offshore wind energy competitive. The report reveals that the current levels of government support are insufficient to bridge the cost gap. This gap represents the difference between the cost of clean energy and conventional sources like coal. The report estimates that it could take at least 12 years for offshore wind energy to achieve grid parity in India.
To achieve the target of 37 GW by 2030, India faces a daunting total cost gap of approximately $61 billion. This translates to about $8.75 billion per year from 2024 to 2030. The VGF scheme, while a positive step, may not be enough to cover the estimated cost gap of around $1.1 billion per GW of capacity. Swasti Raizada, a Policy Advisor at IISD and co-author of the report, emphasizes the need for bold investments and policy alignment to realize India’s clean energy ambitions. She notes that emerging technologies like offshore wind present transformative opportunities for the country’s energy landscape but require sustained support to unlock their full potential.
Policy Recommendations for Offshore Wind Development
Given the high cost gap associated with deploying offshore wind energy, the report outlines several policy recommendations. One suggestion is to consider postponing the 2030 capacity goal to allow costs to decrease. However, this should not delay the provision of support. The sooner India begins deploying offshore wind projects, the sooner domestic costs will decline. Additionally, the government could explore a new model for pooling renewable energy. This approach would bundle offshore wind with cheaper clean energy sources, such as solar photovoltaic (PV), to create demand and secure off-takers for initial projects.
Moreover, the Indian government is also focusing on strengthening the offshore wind sector’s infrastructure. Recently, V.O. Chidambaranar (VOC) Port in Tamil Nadu was designated as an offshore wind port. This designation will facilitate the construction of a terminal specifically for handling windmill blades and accessories. The terminal will feature two berths with a quay length of 370 meters, enhancing the logistics needed for offshore wind development. These efforts reflect a commitment to building a robust domestic supply chain that can support the growth of the offshore wind industry in India.
