The Union Cabinet, on Wednesday, approved the Viability Gap Funding (VGF) scheme for offshore wind energy projects, with a total outlay of Rs7453 crore.
The total includes, an outlay of Rs 6,853 crore for installation and commissioning of 1 GW of offshore wind energy projects (500 MW each off the coast of Gujarat and Tamil Nadu), and grant of Rs 600 crore for upgradation of two ports to meet logistics requirements for offshore wind energy projects, the government said in a statement.
Prime Minister Narendra Modi also talked about the benefits of the project. He said: “The Cabinet decision to approve a funding scheme for 1 GW offshore wind projects off the coasts of Gujarat and Tamil Nadu will enhance our renewable energy capacity, reduce CO2 emissions and create numerous jobs.”
What is VGF scheme?
As per the government statement, the VGF scheme is a major step towards implementing the National Offshore Wind Energy Policy, which was notified in 2015. The policy aims to exploit the vast offshore wind energy potential within India’s exclusive economic zone.
The VGF support from the government will reduce the cost of power from offshore wind projects and make them viable for purchase by DISCOMs. While the projects will be established by private developers selected though a transparent bidding process, the power excavation infrastructure, including the offshore substations, will be constructed by Power Grid Corporation of India Ltd (PGCIL).
Ministry of New and Renewable Energy, as the nodal ministry, will coordinate with various Ministries/Departments to ensure successful implementation of the scheme.
“Construction of offshore wind energy projects and its operations also require specific port infrastructure, which can handle storage and movement of heavy and large dimension equipment. Under the scheme, two ports in the country will be supported by Ministry of Ports, Shipping and Waterways to meet the requirements of offshore wind development,” the government statement further said.
The commissioning of 1 GW offshore wind projects is expected to generate renewable electricity of approximately 3.72 billion units annually. This will help in a significant reduction in greenhouse gas emissions, amounting to 2.98 million ton of CO2 equivalent per year, over a span of 25 years.
This scheme will kick start the offshore wind energy development in India and also lead to creation of required ecosystem in the country to supplement its ocean based economic activities. This ecosystem will support the development of initial 37 GW of offshore wind energy at an investment of about Rs 4,50,000 crore.
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Cabinet approves Rs 7,453 crore funding for offshore wind energy projects off Gujarat, Tamil Nadu
