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India Plans First Offshore Wind Auctions to Reach 12 GW Capacity

India's first offshore wind power auctions
India mapped out a strategy and timeline for its first offshore wind power auctions (file photo)

Published Jun 10, 2022 8:33 PM by The Maritime Executive

The Indian government on Thursday announced the first steps in the development of offshore wind energy outlining a strategy and timetable for commencing auctions. The first ever auctions are expected in the next three to four months with an initial strategy mapped out for the development of at least 10 to 12 GW offshore power generation.

“During the meeting, transmission and evacuation infrastructure required for offshore wind projects of total capacity 10 GW off the coasts of Gujarat and Tamil Nadu, was discussed,” the Ministry of Power said in an announcement posted on its webpage on June 9. “After a detailed review, it was decided to bid out offshore wind energy blocks.”

Exploration of the potential of wind energy began in India in 2015. While the country has yet to conduct auctions and establish its projects, the government points out the strong potential for wind energy. They highlight that India has over 4,700 miles of coastline, with the subcontinent surrounded on three sides by water. Early plans by the government called for 30 GW of wind capacity to be leased by 2030. In its global assessment for potential offshore wind generation, the World Bank set long-term targets for India for as much as 174 GW of offshore wind power nearly equally divided between fixed-bottom and floating installations.

The newly released plan targets two regions for the first sites. One is in southeast India in the Tamil Nadu state which has the capital of Chennai. The first auctions will focus on this area targeting 4 GW of capacity. The second region is in northwest India in the Gujarat state near Karachi.

Starting this year, the government reports it will bid out 4 GW of capacity annually in each of the next three years. In the following five years they are targeting auctions totaling 5 GW annually. 

The bidding for the first 12 GW will be conducted on a “single-stage two envelope model” where the bidders will be evaluated based on their techno-commercial capabilities and only the technically qualified bidders will proceed to financial evaluation. The financial evaluation will be based on quoted lease fee per sq km of sea bed area. The bidder offering the highest lease fee per sq km of sea bed area would be declared as the winner for the allocation of the project.

As incentives to attract strong bids, the government reports that for the first two years of capacity up to 8 GW benefits of green attributes like carbon credits will be offered. For the entire scope of the project through 2029-30 evacuation and transmission of power from offshore pooling substations to onshore transmission will be provided free of cost for all the projects.