Development of Offshore Wind Energy in India - Legal Framework
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Energy & Natural Resources
India is a country with an estimated population of 1.4 billion. It is only second in rank in terms of population in the world. With the increase in population, the demand for electricity is also increasing. It poses challenges such as power shortages in the country. In April 2022, India's peak power demand for electricity touched 207 GW, which was an all-time high.
It is important for India to increase its power supply without compromising on climate change action plans. In the National Action Plan on Climate Change 2008, the Government of India announced that the development of renewable energy will be one of its goals for combating climate change. With wind energy technology being one of the sustainable means to achieve the increasing electricity demand, the Government of India is taking measures to tap into the wind energy potential of the Indian Coast.
At present, the installed generation capacity is dominated by fossil fuels, especially, coal. As of 31 March 2022, India has installed generation capacity of 4.07.797 MW. Almost Fifty-eight percent of this installed generation capacity is based on fossil fuels. While India has a large-scale deployment of onshore wind energy technologies, there are no offshore wind farms in India. India has a wind power potential of 695.50 GW at 120m hub height. The states with high potential are Andhra Pradesh, Gujarat, Karnataka, Madhya Pradesh, Maharashtra, Rajastan, and Tamil Nadu.
India has set a target of 30 GW of offshore wind installations by 2030. In order to aid India’s transition to sustainable technology, two projects supported by European Union were undertaken: Facilitating Offshore Wind Energy in India (FOWIND) and First Offshore Wind Power Project in India (FOWPI). Also, the Indian Ministry of New and Renewable Energy with the Danish Energy Agency established the Centre of Excellence for Offshore Wind and Renewable Energy as a joint initiative. It aims to facilitate and accelerate the implementation of the Indian offshore wind strategy through various initiatives for spatial planning and permitting process, financial framework and auction design, grid and supply chain infrastructure, and technical standards and rules.
Based on the assessments, Gujarat and Tamil Nadu are states with the most potential for offshore wind energy development. As per the National Institute of Wind Energy (NIWE), Tamil Nadu has a potential of approximately 35 GW, and Gujarat has a potential of 36 GW.
Gujarat is a state located on the Western Coast of India. Gulf of Khambhat in Gujarat is identified as a proposed location for the development of offshore wind energy farm. In 2018, the National Institute of Wind Energy invited expressions of interest for the development of the first 1 GW commercial offshore wind farm in India. In-principle clearance is already granted by several ministries including the Ministry of Home Affairs and the Ministry of Defence. However, the project has not yet commenced.
Tamil Nadu is a state located on the southern tip of the Indian Peninsula. The Gulf of Mannar is located within the territory of Tamil Nadu. NIWE aims to collect data (wind speed and direction, sea surface temperatures, and wave heights and directions) for the Gulf of Mannar to facilitate the development of offshore wind energy in this region. The National Institute of Wind Energy (NIWE) issued a tender for the supply and installation of a floating LiDAR buoy for this purpose in February 2022.
India has a coastline of approximately 7600 km and has great untapped potential for offshore wind energy. India has successfully deployed onshore wind energy technology. It has the third and fourth largest onshore wind farms in the world. However, it requires land which is an increasingly high-demand commodity. Thus, offshore wind energy technology is India’s way forward to harness wind energy and transition to clean energy.
This is the first of two posts dedicated to renewable energy in India. In the second post, we will look at the investment protection and dispute resolution related to large energy projects, particularly where contracts may be concluded with the state- or state-owned entities.