Two public sector giants in India’s energy sector have come together to set up offshore wind energy projects.
According to media reports, power generation company NTPC Limited and oil and gas exploration company ONGC Limited have announced a partnership to set up offshore wind energy projects. The two companies signed a memorandum of understanding last year. The partnership agreement also covers other clean energy sectors like storage and e-mobility.
NTPC recently announced plans to set up 60 gigawatts of renewable energy capacity by 2032. To put this in perspective, NTPC currently has an installed capacity of 66 gigawatts, dominated by coal-based power capacity with 46.6-gigawatts of capacity. The company has just over 1 gigawatt of solar and wind energy capacity. It recently participated in competitive auctions and secured rights to develop large-scale solar power projects.
The Ministry of New and Renewable Energy (MNRE) has set a target to set up 5 gigawatts offshore capacity by 2022 and 30 gigawatts capacity by 2030. However, progress on this front has been extremely slow. The Centre for Wind Energy Technology (C-WET) launched a survey to assess offshore wind energy potential in India in 2010. The survey was expected to be completed in 2-3 years. India adopted its offshore wind energy policy in 2015 and there have been many reports indicating implementation of the first offshore wind project in the the country, but nothing has materialized.
In 2018, MNRE issued an expression of interest to set up an offshore wind energy project. While the EoI attracted interest from several leading Indian and international companies, no further progress has been reported since. In 2019, there were news reports claiming imminent launch of a tender for India’s first-ever auction for an offshore project. The project was supposed to be located in the western state of Gujarat and receive more than $900 million in subsidies. Again, no progress has been reported on this project.
The latest announcement of partnership between the two public sector companies is unlikely to bear any fruits in terms of actual project development, at least in the near future. Offshore wind projects, while much more efficient compared to onshore projects, are very expensive. At present, the subsidized offshore projects will not be able to compete with record-low solar power tariffs.