Government Approves VGF Scheme for Offshore Wind Energy Projects

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The government has sanctioned the viability gap funding (VGF) scheme for offshore wind energy projects with a total budget of Rs 74.53 billion. This includes Rs 68.53 billion allocated for the installation and commissioning of 1,000 MW of offshore wind energy projects. This 1 GW encompasses 500 MW each off the coasts of Gujarat and Tamil Nadu. Additionally, Rs 6 billion has been earmarked for the enhancement of two ports to fulfill logistics needs for offshore wind energy projects.

Private developers chosen through a transparent bidding process will establish the projects, while Power Grid Corporation of India Limited will construct the power excavation infrastructure, including offshore substations. The Ministry of New and Renewable Energy, as the nodal ministry, will collaborate with various ministries/departments to ensure the scheme’s effective implementation. As part of the scheme, the Ministry of Ports, Shipping, and Waterways will provide support to two ports in the country to meet the needs of offshore wind development.

The commissioning of 1 GW offshore wind projects will generate approximately 3.72 billion units of renewable electricity annually, leading to a reduction of 2.98 million tonnes of CO2 equivalent emissions per year over a 25-year period. Additionally, this scheme will initiate offshore wind energy development in India and foster the creation of a necessary ecosystem to enhance its ocean-based economic activities. This ecosystem will facilitate the establishment of an initial 37 GW of offshore wind energy with an investment of approximately Rs 4,500 billion.

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