What are MNRE’s VGF guidelines for 1 GW offshore wind projects?

The Ministry of New and Renewable Energy (MNRE) has unveiled guidelines for implementing the Viability Gap Funding (VGF) scheme for 1,000 MW offshore wind power projects. This initiative aims to boost India's renewable energy capacity and promote offshore wind power generation.

Project Overview

• Total allocation:Amount allocated to the project is Rs 68.53 billion.
• Objective: The objective is to commission 1 GW offshore wind power projects until FY 2031-32.
• Project sites:
  • The National Institute of Wind Energy (NWIE) has selected a 500 MW project site off the coast of Gujarat.
  • A second 500 MW site is being finalized off the coast of Tamil Nadu.

Key Agencies Involved

• National Institute of Wind Energy (NWIE): Nodal agency
• Solar Energy Corporation of India (SECI): The Solar Energy Corporation of India (SECI) will issue tenders for the 500 MW offshore project in Gujarat.

Bidding Process

SECI will hold an international competitive bidding process, requesting offers from developers who must cite the required VGF per MW in their financial bids. Companies may increase capacity by up to 50 MW, but not by more than 550 MW. Key points:

• Developers to quote required VGF per MW in financial bids
• Option to add up to 50 MW extra capacity (not exceeding 550 MW)
• Additional capacity awarded at lowest discovered VGF
• Capacity adjustments in 10 MW increments if allocated VGF is insufficient, and a revised Request for Selection (RfS) will be issued after that.
• The VGF amount will be included in the financial bid, and bidders must show that they have experience with either onshore or offshore wind energy projects in India.

Eligibility Criteria

• Experience in offshore or onshore wind projects in India
• Financial criteria:
  • Net worth
  • Asset management
  • Turnover from last three financial years

VGF Release Structure

The VGF will be disbursed in phases:

• 25% upon completing foundation work
• 35% after commissioning half of the project capacity
• 35% after full capacity commissioning
• 5% after one year of operation

Developers must match the first VGF instalment with an equal amount of equity or debt before receiving funds.

Project Timeline and Specifications

• Commissioning deadline: 48 months from PPA signing
• Design: Inter-state transmission systems (ISTS) compliant
• Power evacuation: Developer responsible up to offshore pooling substation
• Voltage level: 66 kV for connecting to substation

Infrastructure Development

• Substation and transmission work: Constructed by Central Transmission Utility (CTU)
• SECI will coordinate with CTU on offshore substation location
• Possibility of simultaneous commissioning of evacuation infrastructure and wind projects.

Monitoring and Penalties

• Regular project monitoring to be conducted
• Penalties in place to deter inefficiencies

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