The Solar Energy Corporation of India (SECI), a state-owned enterprise, has invited bids for the development of 500 MW offshore wind power projects along the Gujarat coast, backed by viability gap funding (VGF). This follows the Union Cabinet’s approval in June for a VGF scheme aimed at boosting 1,000 MW of offshore wind capacity in Gujarat and Tamil Nadu.
The bid guidelines specify that successful developers will sign power purchase agreements at a fixed rate of ₹4.5 per unit for Gujarat. The lowest quoted VGF will secure the largest project allocation, with a greenshoe option allowing for up to 50 MW of additional capacity, setting the maximum limit at 550 MW.
The VGF initiative is part of the government’s 100-day agenda and aligns with the National Offshore Wind Energy Policy introduced in 2015 to explore wind energy potential in India’s exclusive economic zone. In June, Crisil’s Market Intelligence and Analytics division noted that the VGF scheme could serve as a critical catalyst for investments in offshore wind energy, a sector hindered by high costs, operational challenges, and off-take risks.
Although offshore wind energy projects are more expensive—four times the cost of onshore wind on a per-GW basis—they offer higher plant load factors of 40-45%, compared to 25-30% for onshore projects. Offshore projects also make use of sea areas, preserving valuable land resources.
