Tamil Nadu to buy 4GW offshore wind energy under VGF scheme
CHENNAI: TN government is planning to buy 4 Giga Watt (GW) of offshore wind energy under the Union government's viability gap funding (VGF) scheme as India's first tender for sea-bed leasing for offshore wind projects is likely to be issued before the end of this year. This comes as 14 blocks of seabeds in Tamil Nadu have been earmarked as potential sites for generating 1GW of offshore wind energy by the Ministry of New and Renewable Energy.
Industry secretary S Krishnan on Friday said the state desires to have tenders for both open access (4GW) and under VGF scheme (4GW) simultaneously. The state had initially quoted a price of Rs 3 kw per hour (KWH) but the ministry came out with a price of Rs 4 KWH under VGF mechanism for which the state has agreed. The original cost of producing offshore wind power is around Rs 6 to Rs 7.5 kwh. Under VGF, the Centre will bear the open access cost of offshore wind power which is sold in the exchange while offering subsidy to the state. The state is also keen to have some portion of the offshore wind power (4GW) which would be bid through open access.
Industry sources told TNIE that the decision to float tenders under VGF scheme would depend on the Union Cabinet decision. It is learnt that first tender will be for four blocks of sea-bed underb open access in the Gulf of Mannar, off the coast of southern Tamil Nadu, each of which can accommodate 1 GW of wind power plants.
Tender documents are under stakeholder consultation and sources said some issues need to be ironed out before the tender is floated. This include fixing responsibility on who will provide grid connectivity from offshore to onshore facility (for around 30 km) and reworking the timeline from five years to seven years for the developer to implement the project. Currently, it is unclear on whether it will be Power Grid Corporation of India or Central Transmission of India Utilities which will do the grid from onshore to offshore.
Meanwhile, India will be adding another 58GW of onshore wind energy in the next seven years with an investment of Rs 4 lakh crore. Currently, the renewable energy mix of the country is 172.4MW of which wind's share is around 42 to 43 GW, according to D V Giri, secretary general of Indian Wind Turbine Manufacturers Association.