India’s first tender for sea-bed leasing for offshore wind projects will be out “very soon”, perhaps by the end of this month (March), according to Rakesh Katyal, Director, National Institute of Wind Energy (NIWE), the government body that will issue the tender.
This is the first step, a milestone, but the first unit of electricity from an offshore wind power plant in India will take a good seven years.
The tender will be for four blocks of sea-bed in the Gulf of Mannar, off the coast of southern Tamil Nadu, each of which can accommodate 1 GW of wind power plants. Bidders will be given marks for their technical capabilities (70 per cent) and the lease rent they offer for the sea-bed (30 per cent); the highest four bidders will get a consent letter from NIWE for conducting survey. Then, with the consent letter, they go to the Ministry of New and Renewable Energy (MNRE), to sign the ‘Agreement to Lease’, then ‘Survey Lease Deed Agreement’ and then the ‘Construction and Operation Lease Deed Agreement’. Once these agreements are in place, the winning bidders come back to NIWE to get the ‘Concessionaire Agreement’.
This process is expected to take about three years and then the bidders get four years to construct the projects.
Speaking at the Second UK India Offshore Wind Summit that was held in Chennai on March 10, Katyal said that the tender would be under the ‘model - 3’ envisaged in a government ‘strategy paper’ of July 2022 – this means that those who build the wind power projects will sell their power on ‘open access’ directly to customers without any financial assistance from the government of India. The government expects to build 12GW of offshore power through the ‘model - 3’.
Katyal saidthe NIWE had put up 74 masts covering the entire coast of India to measure wind speeds. It has found that the southern coast of Tamil Nadu, for which the first tender is to come, has wind speeds of 9-10 meters per second.
Meanwhile, MNRE is working on a tender for 1GW of capacity for one zone off Gujarat coast, under ‘model - 1’, where the government will provide ‘viability gap funding’. He said that the Ministry of Finance had sought some clarifications of MNRE, to which MNRE replied “ten days ago”. A tender for Gujarat would also come out soon, Katyal said.
The identified areas off Gujarat coast have wind speeds of 7.5 meter per second at 100 meters height and 7.7 mps at 120 meters height, he said.
In his presentation, Katyal said as per NIWE’s estimates, there is offshore wind potential of 37.2 GW off Gujarat and 25.3 GW off Tamil Nadu.
Cost of offshore wind energy
The big question is, what will be the cost of electricity from offshore wind power plants? Many industry veterans that businessline spoke to said it a kWh would cost ₹8-10. Offshore wind power is, therefore, very expensive, but experts say that since the proportion of offshore wind power to total power purchased by the various electricity distribution companies is very small, it would add just a few paise to the distribution companies’ average cost of power procurement.