Offshore wind energy: TN may see $30-bn investment

14 locations with potential to generate 25 Gw of wind energy identified in state

Wind resource-rich Tamil Nadu (TN) is looking to play a pivotal role in the offshore wind energy sector with an estimated investment of over $30 billion, according to industry experts. They, however, indicate that growth will hinge on evolution of technology and the government’s viability gap funding (VGF) to bring down cost.

According to government estimates, as many as 14 locations with the potential to generate around 25 gigawatt (Gw) of wind energy have been identified in the state.

Denmark is betting big on India’s wind offshore market potential. In September last year, the setting up of a 4-10-Gw energy island — an offshore wind farm in the Gulf of Mannar — was one of the key topics of discussion during Denmark Energy Minister Dan Jannik Jorgensen’s visit to India.

However, Indian energy experts observe that in the absence of VGF, offshore wind farms will be unviable.

According to industry estimates, the per-megawatt cost of setting up an offshore wind power plant is ~8-10 crore.

“If one wants to install a turbine, the cost of power is likely to be ~8-9 per unit. The government is now talking about auctioning the wind site without any VGF. If VGF is not there, who will buy power at ~9 per unit? Offshore wind energy will not take off without viability funding,” said D V Giri, secretary-general, Indian Wind Turbine Manufacturers Association.

The association says that of the total offshore potential of about 70 Gw in India, 35 Gw will be in TN. The state has already put forward four initial sites for the first auction of 4 Gw equivalent seabed in 2022-23. These will be leased to carry out required studies and surveys and subsequent project development under an open-access model.

India and Denmark have launched a knowledge hub called the Centre of Excellence for Offshore Wind and Renewable Energy to play a crucial role in facilitating, accelerating, and implementing India’s offshore wind strategy.

“The Indo-danish collaboration in offshore wind energy is expected to create significant economic opportunities across the value chain. While we have seen some Danish and European companies in the wind energy supply chain investing and establishing presence in India in recent years, we are expecting many more to establish a much larger presence through foreign direct investment, joint ventures, and collaboration with Indian businesses,” said Alex T Koshy, director, India entry advisory services of SAS Partners, a corporate advisory firm facilitating and managing foreign investments in India.

Some important Danish companies in TN include Vestas, CUBIC, Maersk, Grundfos, Flsmidth, and Danfoss.

“Whether it is Vestas, GE or Siemens, everybody is present in India, but nobody has a presence in the offshore segment. Danish companies will bring new technology. As far as offshore generation is concerned, its impact on the fishing community must also be studied,” added Giri.

The Indian Wind Turbine Manufacturers Association says that of the total offshore potential of about 70 Gw in India, 35 Gw will be in Tamil Nadu