While Tamil Nadu and Gujarat are seen as having tremendous potential for offshore wind energy, the falling onshore wind tariff has led to questions on the viability of offshore wind, whose tariff is high.
“Offshore wind projects have higher capacity and offer more stable generation profiles when compared to their onshore counterparts. However, currently, it is several times costlier than onshore wind energy,” Shantanu Jaiswal, the New Delhi-based India research head at Bloomberg New Energy Finance said.
Large commercial offshore wind projects could become a reality in India in the next 7-10 years if efforts were taken now and there were improvements in policy, technology and supply chain, he added.
Recently, onshore wind power tariffs hit a new low of ₹2.64 per unit in the Centre’s second round of competitive auction for wind energy. Tamil Nadu, which was the first State to go for competitive bidding for wind power for 500 MW in August, discovered a tariff of ₹3.42 per unit.
According to Malolan Cadambi, Managing Director of Greenshore Energy Pvt Ltd, as per a pre-feasibility study done by the European Union, the estimation for minimum possible tariff for offshore wind would be ₹12 per unit in Tamil Nadu and ₹17 per unit in Gujarat, using fully imported machinery from Europe.
“At those prices, there will be no takers in India,” he added.
However, he said if offshore wind projects were fully localised, the cost would come down, making it viable as in the case of China.
“The first offshore wind farm built in China had a tariff of about CNY 1.14 per unit and the latest Longyuan one has a tariff of about CNY 0.78 per unit, representing a nearly 50% reduction in cost. This works out to ₹7.68 per unit,” Mr. Cadambi added.
According to the Global Wind Energy Council (GWEC), India has the world’s fourth largest onshore wind market with a total installed capacity of over 32.6 GW.
“Offshore wind has taken dramatic steps forward in the past two years, particularly in the major established market in Europe where tender prices have dropped by more than 50% in the last 18 months,” according to Steve Sawyer, GWEC Secretary General. “It’s a rapidly maturing technology ready to go global and we expect India to be one of the major beneficiaries.”