India's offshore wind faces 12-year wait for grid parity

The VGF scheme may not be enough to fill the gap.

Amidst offshore wind opportunities in India, a study by the International Institute for Sustainable Development showed that it may take at least 12 years to reach grid parity.

It said in its report that the viability gap funding (VGF) scheme of INR 6,853 crore for the installation of the first 1 gigawatt (GW) offshore wind plants is an important development. However, this might not be enough given the additional cost gap of around INR 9,000 crore per GW of capacity.

Achieving the target of 37 GW of offshore wind energy by 2030 requires significant financial support. The report revealed a cost gap, estimated at INR 5.1 lakh crore, or an average annual funding requirement of INR 73,000 crore between 2024 and 2030, based on a capital-based incentive.

“Sharing the support costs between public and private investors was projected to increase GDP gains whilst reducing government spending due to more efficient allocation of funding and resources,” the report read.

“Even if governments were to bridge 100% of the cost gap, we projected a positive [benefit-to-cost] under all scenarios, indicating that supporting offshore wind makes economic sense,” it added.