Offshore wind plan 2.0 faces global headwinds in India's renewable journey

India has no offshore wind capacity but is on track to commission record 6 Gw of onshore wind capacity in FY26, says Joshi

Union Minister for New & Renewable Energy (MNRE) Pralhad Joshi — in his latest post on Linkedin — gave a rousing call to make “wind power the cornerstone of India’s clean energy future.” Joshi had inaugurated the 7th edition of Windergy in Chennai on October 30. 

Wind is still a bystander in India’s renewable journey, while offshore wind, a distant cousin, is still out of sight. 

That may be about to change. India is taking a second stab at launching a tender for offshore wind-powered electricity. 

This comes even as the developed, western world retreats from an expensive clean energy technology on concerns over viability and a hostile US administration. 

Offshore wind is dominated by a few large western developers, who are exiting global projects to focus exclusively on Europe, slashing the pool of bidders for the Indian auction. 

This is after Denmark’s Orsted, the world’s biggest offshore wind developer, slipped into near bankruptcy this year, company data shows. 

The retreat of those like Orsted from developing markets crimps New Delhi’s ability to make a success of an upcoming auction round for offshore wind unless fis­cal terms are very inviting and capacities are huge, a senior official from MNRE told Business Standard on the sidelines of Windergy. 

India will launch a new tender in early 2026, seeking bids from global and local developers to install as much as 1 gigawatt (Gw) of offshore wind capacity in the open seas, off the coast of Gujarat and Tamil Nadu, Joshi said in Chennai. 

The government will pitch in with ₹7,500 crore in viability gap funding (VGF) to support bidders. 

Tamil Nadu has agreed to purchase offshore wind power at a premium of

₹4 per kilowatt hour, said Aneesh Sekhar, managing director (MD) of Tamil Nadu Green Energy Corporation. 

High cost power 

India has the potential for 1,164 Gw of wind energy, including 70 Gw for offshore wind, according to the National Institute of Wind Energy (NIWE). India has no offshore wind capacity currently, but it is on track, after a lull, to commission a record 6 Gw of onshore wind power in FY26, with 3 Gw already in operation, Joshi said. That compares to 4 Gw in the entire FY25. 

Offshore wind power will be much more expensive despite the central government’s VGF and a higher tariff offer from the Tamil Nadu government, Rajendra Kharul, founding partner, ClimateHub Advisors, told Business Standard. 

Kharul said that offshore wind energy costs around ₹9-10/Kwh, four times of solar power tariffs, because it costs ₹22 crore to install 1 Mw of offshore wind turbine capacity compared to ₹7-8 crore for onshore wind and less than ₹5 crore for solar. VGF covers only around 3/Kwh in tariffs and even after adding state subsidies there is a gap that the developer must plug in order to compete with other forms of electricity. 

Also, it will take a decade for a bidder to develop India’s first offshore wind project compared to 18 months for solar and 36 months for onshore wind, Kharul added. But offshore wind turbines offer twice the utilisation of a typical solar project, and

10-20 percentage points more than onshore wind, making them more suitable for round-the-clock renewables projects. 

Integral role 

Despite the hurdles, wind energy will play an integral role in advancing India’s clean energy targets of 500 Gw by 2030, Joshi said. He expects wind energy capacity to nearly double to 100 Gw by the end of this decade from 53 Gw now. 

Towards this goal, India is sweetening the terms of the second offshore wind rou­nd and consulting global and local developers before it launches an auction offering 500 Mw of wind capacity each off the coast of Gujarat and Tamil Nadu. This was revealed by Santosh Kumar Sarangi, MNRE secretary, on the sidelines of the event. 

Bidders may make offers separately for projects in both states or club it together to install 1 Gw capacity in either state, and use the entire VGF available for a single project, said Sivakumar Vepakomma, director of power systems at state-owned Solar Energy Corporation, which will conduct the auction. 

The first offshore wind round, which was abandoned this August, offered 500 Mw of capacity off the Gujarat coast and ₹5,600 crore as VGF, which developers found inadequate, Vepakomma said. 

Separately, New Delhi had also offered seabed rights off the coast of Tamil Nadu to set up 4 Gw of offshore wind benefits without VGF. This was primarily to attract large steel or aluminium industries seeking green power. None turned up to bid. 

The wind speed and shear is different in both states, with Tamil Nadu offering a higher capacity utilisation factor of 40-50 per cent, or more electricity output, a MNRE official said. Also, offshore wind still lacks a local supply chain, related infrastructure and a logistics network in India, said  Girish Tanti, vice-chairman of Suzlon Energy, at the event, which requires greater handholding by the government even after the auction. India lacks road and port infrastructure, and hauling equipment to transport and install modern offshore wind turbines with blades measuring up to 400 feet each and are over 400-500 feet tall. 

Indian companies like Suzlon, Adani and Envision build turbines for the onshore wind industry, but offshore wind equipment is much more technologically complex and built from high tolerance materials, a MNRE official said. 

This leads to a total dependence on imports. 

India needs visibility of a few offshore wind projects to develop a local supply chain, a senior official from Suzlon Energy said. That compares to over 65 per cent of localisation for onshore wind equipment. Delhi has now announced a domestic sou­r­cing mandate scheme to increase localisation to over 80 per cent, Joshi said.