Published on May 19th, 2012 | by Mridul Chadha1
India May Soon Approve Its First Offshore Wind Project
The Indian government may soon allow project developers to set up the first offshore wind energy projects in the country. The initiative by the government has been taken after several project developers expressed willingness to set up offshore projects which may deliver higher revenue compared to onshore projects.
Some of the leading companies in India, like ONGC Limited, have asked government agencies to let them set up offshore projects. While the government is believed to have started work on formulating an allocation or auction policy for potential project sites, the actual implementation may take a significantly longer time.
Onshore projects in Tamil Nadu, the leading state in wind energy generation, have been grappling with lack of transmission infrastructure. Some project developers have even moved their projects out of Tamil Nadu due to power evacuation issues.
While there are a number of technology providers in India which can provide integrated services for offshore projects, installing transmission lines could be a big task.
There could be security issues as well. According to media reports, the government has been talking to the Indian Coast Guard about this issue. There have been reports that the large wind farms pose security issues due to complications with radar imaging. India claims to have increased vigilance along its coastline since the 2008 Mumbai attacks and it surely doesn’t want to take a step backwards.
Nonetheless, project developers seem attracted to offshore projects, as most of the high-wind-density onshore sites have already been used up. The eagerness of the project developers to venture into offshore projects is a testament to the increased confidence and risk appetite of companies in the wind energy sector.
The government recently withdrew a major tax incentive enjoyed by wind project developers, but new companies have still entered the sector and attracted millions of dollars in investments. Also, domestic lenders are much more comfortable providing debt to the wind energy sector, which has the best track record of all renewable energy sectors in India. Thrust in the wind energy sector has also been propelled by the introduction of Renewable Purchase Obligation policy in India.
The views presented in the above article are author’s personal views only.