On May 29, India's Ministry of New and Renewable Energy ("MNRE") released the "Draft National Offshore Wind Energy Policy, 2013." The Policy is the result of the National Action Plan on Climate Change conceived by the government of India in 2008. The Action Plan recognized the challenges presented by the lack of policies and regulatory framework to encourage the renewable energy sector in India.

The government aims through the Policy to promote investment in the clean energy sector, reduce India's carbon footprint, and achieve energy security in a relatively new industry.

Offshore wind farms are preferred because of the minimal impact on the environment and the nonavailability of land in densely populated coastal areas in India with high wind potential. The objectives of the Policy are: (i) to provide a conducive environment for harnessing offshore wind energy in India and reducing the dependence on thermal coal power, which results in a significantly larger carbon footprint; (ii) to develop offshore wind energy in a systematic manner; (iii) to overcome the existing barriers to generation and transmission of offshore wind energy; and (iv) to create technological and implementation capabilities within the country for the generation and harvesting of wind energy from offshore wind farms.

The Policy is intended to be a comprehensive document to assist prospective developers with preliminary resource assessment and demarcation of blocks; provide guidance on conducting an Environment Impact Assessment study of a proposed offshore wind farm's effects on aquatic life; provide guidance on conducting oceanographic studies to determine construction, operational, and maintenance costs; assist in sea bed lease arrangements; and offer a single-window procedure for statutory approvals, grid connectivity, incentives, technology, and data security.

The MNRE's role includes monitoring, coordinating with other government departments, issuing guidelines for development of offshore wind energy, supporting the National Offshore Wind Energy Authority ("NOWA"), and promoting indigenous research for technology development. NOWA is to be established under the MNRE as a nodal agency that will carry out resource assessments and surveys in India and enter into contracts with project developers for development of offshore wind energy projects in territorial waters. NOWA will act as a single-window agency and coordinate with the other Ministries for necessary clearances.

NOWA will undertake a preliminary resource assessment through specialized agencies. Private players can take part in the assessment, but ownership of the data will be shared, and the data collection policy will be similar to that followed in oil and gas exploration and production. Clearances required for commissioning the project will be obtained from various ministries including the Ministry of Defense, Ministry of Petroleum & Natural Gas, and the Ministry of Environment and Forests. The offer of blocks will be through an open international competitive bidding process. Sea bed leasing will be undertaken by NOWA, with such leases limited to the exploration and exploitation of wind energy.

Project developers will enter into a power purchase agreement with a designated nodal agency of state, and wind power will be purchased directly as per the norms and guidelines fixed by the Indian Central Electricity Regulatory Commission and the respective State Electricity Regulatory Commissions.

To incentivize development of India's offshore wind capacities, the following measures are being considered:

  • A tax holiday for the first 10 years, concessions in custom duties, and exemptions in excise duty may be available for manufacturers of offshore wind turbines;
  • A call for development of certain blocks without any lease fee paid for such blocks, with ownership of these projects transferred to the government of India after a specified period; and
  • Autonomous research and development for Offshore Wind Turbine Models offered by the Centre for Wind Energy Technology, to assist the owner of the project in ensuring that the design of the structure is suitable for use in the allotted block on the seabed.

India's Agency for Non-Conventional Energy and Rural Technology has been entrusted with the task of conducting a wind monitoring study with the assistance of the government of The Netherlands to identify potential offshore sites. The data gathered so far shows a potential of about 1 gigawatt from installations along the coasts of Indian states of Kerala, Karnataka, Goa, Tamil Nadu, and Gujarat.