India To Auction Sea Blocks For Offshore Wind Projects Next Year

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India’s bureaucratic machinery seems to be working at full steam to make offshore wind energy policy a success.

The Ministry of New & Renewable Energy has announced that tenders for an auction of sea blocks designated for development of offshore wind energy projects shall be floated over the next three months. The blocks will be allocated to companies on the basis of competitive bidding of tariffs.

The nodal agency for development of offshore wind energy projects, the National Institute of Wind Energy (NIWE), would identify the suitable blocks in consultation with, and following clearance from, the Ministry of Defence.

Understandably, the auction will be open to foreign companies, but the NIWE will enjoy the right to reject application of any company on ground of national security without giving specific reasons. This could mean that Chinese companies may have a difficult time succeeding in the auction. In the past several stakeholders in India have urged the government to ban the use of Chinese power equipment due to security reasons. As far as experience in the development of offshore wind energy projects goes, Chinese companies lag behind their European counterparts which are expected to dominate the auction.

European companies already active in the Indian market such as Vestas and Gamesa are expected to actively participate in the auction, while Suzlon Energy, an Indian company, is also expected to participate, and will rely on the technical know-how gained during its control of European company Senvion (formerly REpower Systems).

Suzlon Energy is already working on a 600 MW offshore wind energy project in the state of Gujarat, which will require an estimated expenditure of $920 million. The project is being developed as part of an agreement signed with the state government, and Suzlon Energy is expected to approach the power regulators to get an approval for the tariff.

Suzlon Energy sold Senvion earlier this year but still enjoys the right to use the latter’s offshore wind energy technology in India.

Last month, the Indian government approved the National Offshore Wind Energy Policy. While the policy does not state any capacity addition targets, the overall wind energy targets stand at 60 GW installed capacity by 2022.