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Cabinet approves Rs. 7453 crore scheme for offshore wind energy projects

June 20, 2024 11:06 AM IST

VGF scheme | Wind energy projects

The government has approved a funding scheme worth Rs. 7453 crore to support offshore wind energy projects. This includes Rs. 6853 crore for setting up 1 GW of wind energy projects, with 500 MW each off the coasts of Gujarat and Tamil Nadu. Additionally, Rs. 600 crore will be used to upgrade two ports to handle the logistics for these projects.

The VGF scheme is a crucial step in implementing the National Offshore Wind Energy Policy, launched in 2015, which aims to tap into the vast offshore wind energy potential within India’s exclusive economic zone. Government support through VGF will lower the cost of power from these offshore wind projects, making it more affordable for distribution companies (DISCOMs) to purchase. Private developers, chosen through a transparent bidding process, will establish the projects, while the Power Grid Corporation of India Ltd (PGCIL) will build the necessary power transmission infrastructure, including offshore substations. The Ministry of New and Renewable Energy will coordinate with various ministries and departments to ensure the scheme’s successful implementation.

The development and operation of offshore wind energy projects require specific port infrastructure to handle large and heavy equipment. The Ministry of Ports, Shipping and Waterways will support two ports to meet these needs.

Offshore wind energy offers several advantages over onshore wind and solar projects, such as higher reliability, lower storage requirements, and greater employment potential. Developing this sector will bring widespread economic benefits, including attracting investments, fostering indigenous manufacturing, creating jobs, and advancing offshore wind technology in India. It will also contribute to India’s energy transition goals.

The successful commissioning of the 1 GW offshore wind projects is expected to generate approximately 3.72 billion units of renewable electricity annually, reducing CO2 emissions by 2.98 million tons each year for 25 years.


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Last updated on: 19th July 2024