Cabinet givs nod to VGF scheme for offshore wind energy with Rs 7,453 crore outlay
Union Cabinet on Wednesday approved a viability gap funding (VGF) scheme for offshore wind energy projects with a total outlay of Rs 7,453 crore, including Rs 6,853 crore for installation and commissioning of 1 GW of such projects.
The 1 GW offshore wind energy projects will be of 500 MW each off the coast of Gujarat and Tamil Nadu.
The outlay also includes a grant of Rs 600 crore for upgradation of two ports to meet logistics requirements for offshore wind energy projects.
ET had earlier reported that 1 GW of offshore wind capacity could be bid out under the VGF scheme as part of the 100-day of the new government taking charge.
The VGF scheme is a step towards implementation of the National Offshore Wind Energy Policy issued in 2015 with an aim to explore the potential within the exclusive economic zone of India.
The offshore wind projects of 1 GW will produce renewable electricity of about 3.72 billion units annually and create the required ecosystem to supplement its ocean-based economic activities, a government statement said.
This ecosystem will support the development of initial 37 GW of offshore wind energy at an investment of about Rs 4,50,000 crore, it added.
The funding will reduce the cost of power from offshore wind projects and make them viable for purchase by the power distribution companies
While the projects will be established by private developers selected through a bidding process, the transmission infrastructure, including offshore substations, will be constructed by state-owned Power
