The Ministry of New and Renewable Energy (MNRE) has sought global bids for building, commissioning and operating 4,000 megawatts (MW) of offshore wind power projects off the coast of Tamil Nadu.

State-run Solar Energy Corporation of India (SECI) has floated a request for selection (RfS) for the survey and development of offshore wind energy capacities. The last date for submitting bids is May 6, 2024 and they will be opened the next day.

The government has proposed to lease out seabed areas for 4,000 MW equivalent offshore wind project capacity, including specific identified offshore wind sub-blocks off the coast of Tamil Nadu in the Gulf of Mannar.

The bids are for four blocks of 1,000 MW each on an open access basis, which allows the developer to sell electricity directly to consumers under the open access regime.

The successful bidder will have exclusive rights over the allocated seabed to carry out the required study, survey and subsequent project development. This will be subject to payment of lease rental of ₹1 lakh per sq km per year.

The scope of work comprises designing, building, financing, constructing, commissioning, operating, maintaining and decommissioning.

The scope also includes the development of transmission systems to deliver the power at the offshore substation and grid connectivity and long-term access to the grid shall be in the scope of the offshore wind power developer (OWPD).

The energy generated from these offshore wind power projects may also be consumed in captive mode or sold to third parties (including on merchant basis) or on power exchanges.

“SECI does not however give a representation or warranty on the availability of fiscal incentives, and submission of bid by the bidder shall be independent of such availability or non-availability, as the case may be, of the fiscal incentives; as per the prevailing incentive mechanism,” the agency said.

The bidders will be free to avail fiscal incentives such as accelerated depreciation, concessional customs and excise duties, tax holidays, etc, as may be available for the projects.

The government is also increasing its focus on developing offshore wind capacities due to its higher benefits. For instance, absence of obstruction in the sea offers much better quality of wind and its conversion to electrical energy. Offshore wind turbines are much larger in size (around 15 MW per turbine) as against 2-3 MW of an onshore wind turbine.

Offshore wind projects also have a higher Capacity Utilisation Factor (CUF) in the range of 50 per cent.

While the cost per MW for offshore turbines are higher because of stronger structures and foundations needed in the marine environment, competitive tariffs can be achieved aided by higher efficiencies of these turbines after the development of the ecosystem.

In the interim budget for FY25, the government has announced viability gap funding (VGF) for 1,000 MW of offshore wind power projects.