Share this article
India’s Ministry of New and Renewable Energy (MNRE) has published a revised strategy for offshore wind according to which areas will be awarded for development through three models, with the first tender under one of the auction models expected to be launched in December. MNRE has also issued two calls for tenders for offshore wind surveys related to two of the auction models.
offshoreWIND.biz is read by thousands of professionals every day.
Increase your visibility with banners, tell your story with a branded article, and showcase your expertise with a full-page company profile in our business directory.
Follow offshoreWIND.biz on:
Join thousands of industry professionals who start their day with our newsletter.
In this article:
On 17 August, MNRE, the ministry responsible for offshore wind development in India, released a new strategy that details the areas to be awarded and also proposes auction models to allocate sites for the development and construction of offshore wind projects.
In the strategy, MNRE states that “ eight zones each off the coast of Gujarat and Tamil Nadu” were identified as potential offshore wind energy zones.
The three different models of awarding sites for development are based on whether the areas have been identified by the government or the developer (unsolicited lease request) and whether surveys at the areas are being (or will be) done by the government or the developer.
Preliminary studies across India’s coastline have been carried out by the National Institute of Wind Energy (NIWE), the agency responsible for offshore wind development in India that is working alongside MNRE as the ministry in charge. The offshore wind potential was assessed by the FOWIND (Facilitating Offshore Wind in India) consortium with NIWE as a knowledge partner.
The studies have indicated good potential both for offshore wind farm development off the Southern tip of the country and the West coast, according to the new strategy , with several zones off the coast of Gujarat and Tamil Nadu identified as potential offshore wind energy zones following the assessment of various parameters such as wind resource and bathymetry.
The zones and sites identified by MNRE and NIWE are estimated to have the potential to house a total of around 14 GW of installed offshore wind capacity , with a further 22 GW estimated to be available to be tapped into through unsolicited lease requests.
MNRE and NIWE have zoomed in on the areas offshore Tamil Nadu and identified 14 sites where offshore wind farms would be built, with 13 of the sites to be auctioned under one allocation model and the one remaining site under another.
Offshore Gujarat, the map in the new strategy shows five zones.
According to the information in the strategy, a 500 MW site in one of the offshore wind zones in Gujarat will be allocated through one of the auction models, while the remainder seems to have been left for unsolicited lease requests.
The ministry has proposed the three auction models saying it wants to fast-track the process while also keeping view of the requirement of the holistic development of offshore wind farms in India.
Tenders for India’s first gigawatts of offshore wind are planned to open this and the next year through Model-A and Model-B , while the sites that developers have identified for offshore wind projects ( Model-C ) are anticipated to be awarded starting in 2025/2026.
Model-A entails demarcated offshore wind zones for which MNRE/NIWE have carried out, or have proposed to carry out, detailed surveys. Currently, part of the identified Zone B3 off Gujarat ( see image above ) with a potential capacity of 500 MW and a site off Tamil Nadu with the same capacity potential will be considered in Phase 1 of this model.
MNRE says that, through its implementing agencies, the ministry will formulate a plan for procurement of offshore wind capacity under this model, with projects to be supported in the form of Viability Gap Funding (VGF) to achieve a predetermined power tariff.
The new strategy does not set a date for tendering out these two sites, but it shows the timeframe for the first auction to be 2023/2024. The first 500 MW site to be awarded through the Model-A tender is expected to be off Gujarat since MNRE and NIWE have already performed site surveys there. The 500 MW site off Tamil Nadu will be auctioned off after surveys and studies have been completed.
For Model-A, a single-bid, two-stage process followed by an eReverse Auction (e-RA) will be adopted, with the bidding to be carried out by Solar Energy Corporation of India Ltd. (SECI). The e-RA will be based either on the tariff or the Viability Gap Funding (VGF) amount required for making the project viable with a pre-determined tariff.
This auction model could be further extended to other zones where developers who have carried out the necessary studies and surveys, with data available for sharing, have later relinquished the capacity, according to the revised strategy.
The first tender under Model-B is planned to be launched on 1 December this year .
The site allocation approach through this model encompasses a seabed lease with site exclusivity during the study/survey period and project development without any VGF support.
“This model envisages offshore wind project development for sale of power under open access/captive/third party sale without any VGF assistance from Govt. of India” , it is stated in the new strategy document.
Through a competitive process, MNRE and the relevant agency will allocate identified offshore wind energy sites to prospective developers under an exclusive lease for a period of two years to carry out studies and surveys. After the study/survey period has expired, all clearances issued to the developer will be withdrawn and the developer will be required to relinquish the lease and share the data acquired during the study/survey.
Following the survey period, the developer will need to submit a detailed project report and enter into a 35-year lease agreement for project development and power sale under open access/third-party sale regime. The government may also call for bids for the procurement of electricity for distribution companies on the basis of tariffs after two years, according to the strategy.
The competitive bidding under Model-B will be carried out under a single stage two-envelope process, comprising a technical bid to assess bidders’ technical and financial capability, and a financial bid for the lease site allocation fee.
Each offshore site will be assigned a minimum installable wind power capacity that must be established by the selected developer. However, the selected developer will be able to establish any additional capacity over the assigned capacity within the allocated seabed to optimise the offshore wind site utilisation, according to the details in the strategy.
Model-B will include most of the offshore wind sites off Tamil Nadu, 13 out of the 14 identified for the development of wind farms in the state’s waters.
The initial sites proposed to be offered under Model-B have an estimated total capacity of 14 GW.
The first tender for 4 GW of capacity is tentatively planned to be opened on 1 December and to offer sites 1, 2, 3 and 4 in Tamil Nadu waters.
The second auction is planned to offer a further 3 GW at sites 5, 6 and 8 in the financial year 2024-25.
The third site allocation model, Model-C, is reserved for study/survey permits without exclusivity over the seabed during the study/survey period, as well as the subsequent project development without any VGF support.
This model concerns the sites identified by the developers within India’s Exclusive Economic Zone (EEZ) and excludes the sites already identified under Model-A and Model-B.
The developer may select any site(s) within the EEZ and submit a proposal for surveys to NIWE, which then facilitates the process as a one-stop shop by coordinating with different authorities for clearances.
Based on the clearances from various authorities, NIWE will issue an in-principle approval and a consent letter, with surveys and studies allowed to commence only after the consent letter is received.
The time limit for surveys is three years, after which the government will set up the process for project development/allocation of the seabed, which could also include bidding employing any of the bidding methods, from bidding on lease/allocation fee to tariff-based competitive bidding.
The developer who has conducted studies of the site they identified may also submit the proposal for project development and allocation of offshore sites, in which case site-specific bidding would be conducted with a first right of refusal to the developer who had conducted the studies/surveys. However, project development would then be carried out without any Central Financial Assistance (CFA), the strategy reads.
At the same time MNRE published the new offshore wind strategy, the ministry also issued two invitations for proposals for studies/surveys of the identified sites proposed to be leased out for offshore wind project development under the Model-B and Model-C auction models.
Developer(s) willing to carry out site investigations in the identified areas are invited to submit the application to the National Institute of Wind Energy (NIWE).
For Model-B, the now-issued tender is for surveys of sites offshore Tamil Nadu without any exclusive rights over the seabed, and is being organised in order for the developers to be ready for participating in the leasing of the seabed that would later be done through the competitive bidding process.
In the tender call related to Model-C, MNRE is inviting interested developers to carry out offshore wind investigations within the EEZ by submitting the application to NIWE through which they will seek consent for surveys.
Follow offshoreWIND.biz on:
about 2 years ago
India’s Ministry of New and Renewable Energy (MNRE) has published a revised strategy for offshore wind according to which areas will be awarded for development through three models, with the first tender under one of the auction models expected to be launched in December. MNRE has also issued two ca
