India approves VGF scheme for offshore wind projects

It includes funding for two 500 MW projects in Gujarat and Tamil Nadu.

India’s Union Cabinet has approved the Viability Gap Funding (VGF) scheme to support the development of offshore wind energy projects with a total outlay of $891.7m (INR7,453 crore).

In a statement, the Ministry of New and Renewable Energy said the funding would include an outlay of $819.9m (INR6,853 crore) for two offshore wind projects with a capacity of 500 megawatts each off the coast of Gujarat and Tamil Nadu.

Once the one-gigawatt projects are completed, the offshore wind farms could generate around 3.72 billion units of electricity annually, and reduce carbon dioxide equivalent emissions by 2.98 million tons for 25 years.

The funding will also include a $71.8m (INR600 crore) grant for the upgrading of two ports of the logistics requirements.

“The VGF scheme is a major step towards implementation of the National Offshore Wind Energy Policy notified in 2015 with an aim to exploit the vast offshore wind energy potential that exists within the exclusive economic zone of India,” the ministry said. 

“ The VGF support from the Government will reduce the cost of power from offshore wind projects and make them viable for purchase by (distribution companies),” it added.

The ministry said the launch of the funding will lead to the creation of the required ecosystem to support ocean-based economic developments, adding that the ecosystem will boost the development of an initial 37 GW of offshore wind energy.

$1 = INR83.58