1. Home
  2. News

Cabinet Approves Rs. 7453 Crore Viability Gap Funding for Offshore Wind Energy Projects

The approval of the Viability Gap Funding marks a crucial step in India's journey towards a sustainable and renewable energy future.

KJ Staff
Cabinet Approves Rs. 7453 Crore Viability Gap Funding for Offshore Wind Energy Projects (Photo Source: Pexels)
Cabinet Approves Rs. 7453 Crore Viability Gap Funding for Offshore Wind Energy Projects (Photo Source: Pexels)

The Union Cabinet, chaired by Prime Minister Narendra Modi, has sanctioned the Viability Gap Funding (VGF) scheme for offshore wind energy projects to enhance India's renewable energy capabilities. This initiative involves a total outlay of Rs. 7453 crore, earmarked for the development of 1 GW of offshore wind energy capacity and the enhancement of port infrastructure to support these projects.

The approved VGF scheme allocates Rs. 6853 crore for the installation and commissioning of two offshore wind energy projects, each with a capacity of 500 MW, off the coasts of Gujarat and Tamil Nadu. Additionally, Rs. 600 crore has been set aside for upgrading two ports to facilitate the logistics necessary for these projects.

This initiative aligns with the National Offshore Wind Energy Policy, introduced in 2015, aimed at harnessing the extensive offshore wind energy potential within India's exclusive economic zone. By providing VGF support, the government aims to lower the cost of power generated from offshore wind projects, making it more viable for distribution companies (DISCOMs) to purchase.

The development of these projects will be undertaken by private developers selected through a transparent bidding process. The Power Grid Corporation of India Ltd (PGCIL) will be responsible for constructing the power evacuation infrastructure, including offshore substations. The Ministry of New and Renewable Energy, designated as the nodal ministry, will coordinate with various government departments to ensure the smooth implementation of the scheme.

To support the construction and operational needs of offshore wind energy projects, specific port infrastructure capable of handling large and heavy equipment is essential. The Ministry of Ports, Shipping and Waterways will upgrade two ports to meet these requirements, thereby facilitating the development of offshore wind energy.

Offshore wind energy offers several advantages over onshore wind and solar projects, including higher reliability, lower storage needs, and greater employment potential. The growth of this sector is expected to attract significant investments, foster the development of indigenous manufacturing capabilities, and create numerous job opportunities across the value chain. Furthermore, it will contribute to technology development in the offshore wind sector, aiding India in achieving its energy transition targets.

The commissioning of 1 GW of offshore wind projects is projected to generate approximately 3.72 billion units of renewable electricity annually. This will lead to an annual reduction of 2.98 million tons of CO2 equivalent emissions over a period of 25 years. The scheme is not only set to kickstart offshore wind energy development in India but also to establish a supportive ecosystem for ocean-based economic activities.

This ecosystem is expected to facilitate the development of an initial 37 GW of offshore wind energy, requiring an investment of around Rs. 4,50,000 crore.

International No Diet Day 2024 Quiz Take a quiz
Share your comments
FactCheck in Agriculture Project

Subscribe to our Newsletter. You choose the topics of your interest and we'll send you handpicked news and latest updates based on your choice.

Subscribe Newsletters