Offshore wind is gaining traction in India as part of a broader push toward sustainable energy solutions. Significant strides have been made to build capacity, including the establishment of a comprehensive policy framework. However, there are still many challenges, including issues related to financing, infrastructure development and environmental concerns. The session on “Offshore Wind Transmission” featured a panel comprising Dr Subir Sen, ED, Power Grid Corporation of India; Prabir Kumar Dash, Director, Scientist E, Ministry of New and Renewable Energy (MNRE); and Dr Arul Shanmugasundaram, ED (Operations), Ayana Power. This article summarises the key discussion points from the session…
Development and policy evolution
The offshore wind energy journey in India began in earnest around 2012, with the establishment of a formal policy framework in 2015. In 2023, the MNRE reviewed its strategy, and announced a strategic paper laying out a clear roadmap and three primary business models, catering to diverse investor needs. The goal is ambitious: 37 GW of offshore wind projects by 2030, with the first phase aiming for 500 MW each in Gujarat and Tamil Nadu.
As India builds out its offshore wind capacity, it is observing the experiences of established markets such as Europe and emerging players such as the US. India can glean valuable insights from these markets, especially regarding grid integration and the development of stable, high-capacity infrastructure.
Infrastructure and transmission challenges
Offshore wind power projects require sophisticated transmission infrastructure due to their offshore location. Transmission involves several critical components, including array cables connecting individual turbines, offshore substations, export power cables and onshore substations. For the upcoming 500 MW project off Gujarat’s coast, a 66 kV array cable will connect turbines to a 220 kV offshore substation. This infrastructure is necessary to stabilise transmission from offshore turbines to onshore stations. Such complexity not only raises costs, but also adds a layer of logistical and environmental challenges, as cable routes must account for shipping lanes, fishery activities and environmental impact.
Environmental and logistical concerns are particularly pronounced in offshore wind projects. Cable installation, for example, must navigate sea-floor mapping, cable burial and environmental impact on marine ecosystems. Moreover, offshore wind projects being set up in India require specialised technology to withstand the country’s relatively low wind speeds. While Tamil Nadu benefits from a more favourable wind profile, Gujarat’s offshore sites may struggle with lower wind availability, necessitating further adaptations in turbine design. It is important to develop a robust local supply chain to minimise dependence on imported components. An indigenous supply chain would potentially reduce project costs and increase the sector’s resilience against global price fluctuations.
Financing and investment appetite
The discussion around the financial viability of offshore wind projects in India is pivotal. There are substantial concerns over high tariffs, even with the viability gap funding (VGF) scheme. For example, while Tamil Nadu and Gujarat are the initial target states, projected tariffs remain at Rs 5.5-Rs 6 per kWh, which could deter investors unless competitive offtake agreements are secured. Although government-backed power purchase agreements could help offset developer risk, the high tariff rates continue to challenge the sector’s bankability. MNRE has opted for VGF to address the cost gap and ensure tariff stabilisation. The issue of financing is further compounded by global supply chain disruptions and increased interest rates in recent years, leading to heightened costs for wind turbine manufacturers and developers. Companies have faced substantial financial setbacks due to volatile conditions. From an Indian perspective, both infrastructure readiness – such as port availability and transmission capabilities – and environmental clearances must be addressed to attract substantial investments from domestic and international players.
Future prospects and strategic direction
India’s offshore wind sector holds considerable promise, with the government committed to providing risk-mitigation frameworks that encourage private investment. Initiatives such as the VGF scheme and commitments to cover a substantial portion of upfront risk underscore this obligation. The government intends to support grid connectivity till offshore substations, a significant cost-saving measure that could cover nearly 25 per cent of the capex. Sustained government support and investment could eventually drive down costs in the offshore wind sector.
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