India’s ever-growing population has nudged its energy needs over the edge, prompting a shift towards offshore wind farms as the source of generating the required energy. This article attempts to explore the potential of offshore wind energy in India, the legal policy framework surrounding it and China’s road towards becoming the Offshore Energy superpower. The Indian Government, to facilitate this energy alternative, has set out targets of attaining tentative offshore wind installations of 5 GW by 2022 and 30 GW by 2030. In the same timeline, China has emerged as the superpower in this sector by connecting more offshore wind generation capacity last year than any other country in the world has managed to install in the last five years. It now operates almost half of the entire globe’s offshore wind energy. Thus, the entire global energy sector should look up to China, its efforts and journey to learn how to pave the way forward.
An Introduction to Offshore Wind Energy
Electricity, a form of energy, has been a subject of intellectual curiosity for millenniums, and the traces of its study can be seen as far back as in Ancient Greece byThales of Miletus. Since then, the idea and conception of electricity have grown tremendously, and today, it stands at the forefront as one of the essential resources for the development of any society. This exerts obvious importance on the procurement and manufacturing of such energy in societies. India’s power sector exists as one of themost diversified power sectors in the world, and the sources of power generation range from conventional sources such as coal, lignite, natural gas, oil, hydropower and nuclear power to viable non-conventional sources such as wind, solar, agricultural waste and domestic waste.
India has witnessed a steep rise in its demand for energy with the upcoming development and modernisation, but it is noteworthy that thecountry’s electricity demand is set to rise higher and quicker than its overall energy demand.
Over the years, India has come to become one of the largest consumers of electricity and is estimated to emerge as thethird-largest consumer of energy in the world by 2030. In May 2018, India ranked fourth in the Asia Pacific region out of 25 nations on an index that measured their overall power.India was ranked fourth in wind power, fifth in solar power and fifth in renewable power installed capacity as of 2018. Notably, as of January 2022, out of the overall consumption and generation of electricity in India,only 10.2% is attributable to wind power, a number that is remarkably low for a country with a coastlineof more than 7600 kms. The coastline of India grants it an exceptional potential for generation of electricity through Offshore Wind Power generation farms.
Mechanism and Functioning of Offshore Wind Farms
Offshore wind energy generation is made possible by the mechanism of deploying and establishing huge structures constituting a wind farm inside water bodies. The primary principle for their functioning is the proper appropriation of stable sea winds through wind turbines to generate energy in the form of electricity. The turbines used by these wind farms can either be fixed-foundation turbines or floating wind turbines, depending upon the anchorage; the former is built in shallow water and the latter in deeper water, with thefoundation anchored in the seabed. The turbines with fixed foundations can opt from an array of foundations like the monopile, gravity-supported or using jackets; however, with the current technology, all of them only permit installations up to 60 meters below the surface. On the other hand, turbines on floating platforms harness the wind into energy by laying underwater electricity evacuation infrastructure, which is permitted to be placed hundreds of meters below sea level, therefore allowing much more area to be fit for such projects.A parallel distinction arises on the basis of the system used to fasten the equipment to the sea bed, which gives birth to the following classifications – single floating columns, tension-leg platforms or semi-subversive platforms. A well-established fact about these offshore wind farms is that they must be constructedat least 200 nautical miles from the shore and 50 feet deep in the ocean.
Whatever might be the preferred mode of setting up these wind energy farms, the energy produced through them is carried back to the shore with the help of cables built and tethered to the ocean floor. This energy is then handed over to the coastal load centers for the purpose of appropriate distribution.
The equation for investment in Off-shore Wind Energy Generation comes to fruition in India, given the limited land and the ever-increasing population, leading to an increased need for energy. Therefore, the deployment of offshore wind farms will prove to bevital to the country’s long-term growth.
The Need for Offshore Wind Energy Generation
Being the world’s third-largest producer and fourth-largest consumer of electricity, India’s energy demand is forecast to grow6-7% year-on-year over the next decade. The Indian Government has overtime introduced multiple initiatives that, one way or the other, push India towards self-sustenance and reliance; these include ‘24*7 Power for All’, ‘Make in India’, ‘Atmanirbhar Bharat (Self-reliant India)’, and the ‘National Mission for Enhanced Energy Efficiency’, all of which aim to create secure and low-carbon energy systems. Renewable energy sources represent the world’s best chance at future energy security; the requirement for renewable and clean energy is therefore indispensable. One such source of energy isOffshore Wind Energy, which is relatively new, with the first of its establishments being only three decades old, i.e., the ‘Vindeby Offshore Wind Farm’, established in 1991, off the coast of the town of Vindeby on the Danish Island of Lolland. Offshore Wind Energy is the one of the most efficient modes of generating electricity and has proven itself to be substantially better than even Onshore Wind Energy. This is because;
1. The speed of offshorewinds tends to be faster than on land. Small increases in wind speed yield significant increases in energy production: a turbine in a 15-mph wind can generate twice as much energy as a turbine in a 12-mph wind. Faster wind speeds offshore mean much more energy can be generated.
2.Offshore wind speeds tend to be steadier than on land. A steadier supply of wind means a more reliable source of energy.
3. Offshore wind energy farms do not require land as a resource to set up, which allows for the preservation of land resources and also allowsfor coastal nations to harness wind energy more efficiently.
4. Offshore wind turbines can be and usually are substantially bigger than their Onshore counterparts, which allows them to generate more power.
5. Offshore wind turbines allow for a15 – 20% increase in efficiency as compared to Onshore wind turbines.
6. Offshorewind farms house a higher CUF (Capacity Utilisation Factor) in comparison to onshore wind farms and hence, allow for longer operating hours.
Given the obvious benefits and advantages of Offshore Wind Energy, the Ministry of New and Renewable Energy (hereafter referred to as ‘MNRE’), India, in 2018 set out a target of attaining5.0 GW of offshore wind installations by 2022 and 30 GW by the year 2030, the chances of the target for 2022 being met however seems slim. Despite multiple government initiatives, and international assistance the present Offshore Wind Energy Potential leaves much to be desired. Thedomestic goals remain unattained, and the true potential of Offshore Wind Energy remains untapped.
Challenges (why it remains an untapped sector)
India, being one of the largest consumers of electricity, has an added pressure to provide a sustainable and renewable source of energy to its’ ever-growing economy; but like most developing economies, it faces some prominent issues with effectuating its’ otherwise admirable plans of establishing multiple Wind Energy Plants. Following are a few notable problems that India faces today in establishing Offshore Wind Energy Farms;
i) Policy Drawbacks: Offshore Wind Energy policy in India is largely tied to the notification put out by MNRE in exercise of the power conferred to itby Article 297 of the Constitution of India, in October 2015. The said notification falls short on providing a detailed roadmap for development in this sector and only succeeds at establishing that the Government aims to encourage heavy investments and development in Offshore Wind Energy. The insufficiency of the policy is apparent from the fact that since its’ introduction, little has changed, and the sector remains largely untapped. The present system lacks transparency and is ambiguous, which only leads to confusion and reluctance on part of prospective investors. The policy makers ought to involve themselves heavily in streamlining the regulations and simplifying the process in order to attract investment and innovation, especially in the wake of the global pandemic the world has been facing since 2019.
ii) Immense Need for Capital Investment: The cost of renewable energy is mostly subject to state tariffs and subsidies thereof. Nonetheless, in most cases, renewable energy, in the long run, surpasses the energy generated by fossil fuels bybeing cost-effective. Despite this, it is incredibly difficult for governments to find eager investors for such ventures as the need for initialcapital investment and resources is too high, in comparison to other renewable energy sources. The 2015 notification briefly states that additional fiscal and financial initiatives shall be undertaken by the Government to promoteOffshore Wind energy projects. In fact, a decision on Viability Gap Funding (hereinafter referred to as ‘VGF’) support for the first offshore wind project from the Ministry of Finance has been delayed in light of the pandemic,but should be accelerated to send a positive market signal. The2021 Global Wind Energy Council (hereinafter referred to as ‘GWEC’) report cited the same reason (need for very high initial capital investments and the lack of financial support) for the non-progression of the Gujarat project. Inmid-2019 MNRE applied for Rs 6,700 crore VGF to cover the extremely high investment for the infrastructure of these projects.
iii) Expensive: Even though offshore wind energy potentially can help the nation produce clean-er energy, the fact that it is more expensive than onshore and solar power cannot be ignored. A report published on Energy on March 2021 by the 17th Standing committee of Lok Sabha clearly stated that the exact cost of offshore turbine and tariff cannot be ascertained at this stage but has been estimated to be two or three times the cost of onshore wind turbines if cost is calculated per megawatt.
iv) Mapping and Logistic planning: There is a level of uncertainty associated with the present and available innovations in the Offshore Wind Energy sector. Erection of such energy plants mandates a level of regional research such as mapping of exclusion zones and areas for other ocean uses such as shipping lanes, defence areas, fishing areas, ecologically protected areas, oil exploration etc., all of which remain partially or fully unavailable.
v) Infrastructure: For being efficient at generating offshore wind energy, offshore wind turbines require longer blades than onshore turbines. Transporting them over long distances poses a real challenge as it is not a feasible option. The GWEC report suggests that the ports of Tamil Nadu and Gujarat would have to be developed while bearing in mind the fact that such blades would require ease of transportation, and as a consequence, they should be manufactured near the closest port, from the offshore site. According to the National Policy, offshore plants have a myriad of challenges that need to be dealt with, some of which include – turbine foundation, subsea cabling, installation of turbines, grid interconnection and operation, coastal security, development of transmission infrastructure, etc.
According to the GWEC report, there also exists a dearth of a plan in place for efficient planning and delivery of offshore wind grid Infrastructure which would transport the power from the offshore plant to the place where it would be used.
vi) Environmental Impact: The infrastructure, construction and operation of these plants have the potential to degrade and even destroy the habitat for the species indigenous to that area. It can be speculated that environmental concerns related to offshore wind developments potentially constitute increased noise levels, risk of collisions, changes to benthic and pelagic habitats, alterations to food webs, and pollution from increased vesseltraffic or release of contaminants from seabed sediments. Additionally, the fast-spinning turbine blades pose a great threat to aerial species. A 2011 ecological profile by the Gujarat Ecology Commission cites the Gulf of Khambhat as one of themost important ecologically sensitive coastal regions of Gujarat. Thus, it is correctly stated by the offshore policy that a tentative Environment Impact Assessment (EIA) study of the plant’s effect on the environment is essential before chalking out a plan of action. In addition to this, a positiveEnvironmental Impact Statement (EIS) must be obtained in order to provide a compatibility report with the fauna, navigation, avifauna, sediment transport dynamics, migration routes, etc.
vii) Job Creation: In light of this, loss of jobs and livelihoods is imminent, and thus, creation of jobs even if that necessitates government intervention, would be of paramount importance.
Progress in Indian Targets and Policies
The discussions surrounding offshore wind commenced when the National Institute of Wind Energy (hereinafter referred to as ‘NIWE’) took the initiative of inviting some of the leading offshore wind technology suppliers for initiating discussions and seeking advice in 2010. This was marked as the foot-in-the-door moment for offshore wind development, which was further facilitated through the projects Facilitating Offshore Wind in India (FOWIND 2013-18) and First Offshore Wind Project of India (FOWPI 2016-19).
The official beginning of India’s journey towards embracing Offshore Wind Energy is clearly marked by the Gazette Notification dated 6th October 2015, through which theNational Offshore Wind Energy Policy (hereinafter referred to as ‘National Policy’) was notified. The preceding FOWIND (2014) project was co-funded by the European Union with the aim of establishing structural collaboration and knowledge sharing between the EU and India on offshore wind technology, policy and regulation and serving as a platform for promoting offshore wind research and development activities. It successfully identified 16 potential zones in Tamil Nadu and Gujarat, with a concept design of150 to 504 MW.
The Central Government has since put outfurther office memorandums and conducted research that has allowed the setting up of viable goals and has helped map out the best locations to set up Offshore Wind Energy projects. NIWE is now identified as the Nodal Agency through the 2015 Notification for the development of offshore wind energy in India, and a substantial responsibility falls upon its shoulders. As a consequence, NIWE has undertaken preliminary assessments along the Indian coastlines (which led to the discovery of serious potential along Gujrat and Tamil Nadu),set up various LiDAR measurement systems, and has also carried out geophysical surveys. It must be noted that as an outcome of FOWPI, 1 GW of tender was targeted to Gujarat,with another 1 GW added later for Tamil Nadu.
NIWE planned to install five Light Detection and Ranging instruments (LiDARs) (a remote sensing method that would gather precise data critical to developing offshore wind projects), but none of thetentatively planned 3 in Tamil Nadu has yet been installed. Nonetheless, it must be noted that according to the GWEC report, one was commissioned in 2017 in Gujarat, which collected data for two years and alsoapproved a ground-mounted wind monitoring station at Jafrabad, Gujarat.
It is hard to acknowledge these actions as being sufficient because half a decade later, India has nothing to show as far as Offshore Wind Energy generation is concerned and thepolicy goals set up remain unattained as well.
MNRE had set a national target of adding5.0 GW of offshore wind installations by 2022 and thereafter, 30 GW offshore wind energy projects by 2030 by harnessing the enormous wind power potential along India’s astounding 7,600km coastline. A notable step forward in concretising the roadmap for Offshore Wind Energy development in India was the introduction of Expression of Interest was floated for the first 1 GW project in the Gulf of Khambhat zone in Gujarat in April 2018, encouraging major global and local players to indulge in this sector. However, this too has come to a complete standstilldue to the high CAPEX and practically no government support. The GWEC report highlights that no tender has been floated for an offshore wind project in Tamil Nadu. However, the state of Tamil Nadu has reportedly been in talks with Denmark forIndia’s first offshore floating wind park in the Gulf of Mannar.
The formulation of the ‘Guidelines for offshore wind power assessment studies and surveys’ in 2018, and the formulation of the ‘Draft Offshore Wind Energy Lease Rules, 2019’, which were put out for comments and suggestions on 25th January, 2019 with the aim of further attracting private sector privatisation. It must be noted that the same remains a draft and no rules exist to regulate the grant of leases for development of Offshore Wind Energy projects along the coastline of India.
All this was followed by the financial modelling of offshore wind farms in India (FIMOI 2019-2021); a partnership between the MNRE, NIWE and the Danish Energy Agency (hereinafter referred to as ‘DEA’). Itaimed to support the Indian Government in gathering information to develop the Indian offshore wind market.
The latest update on the establishment of Offshore Wind Farms in Gujarat is that approvals for VGF of approximately800 million euros are in the pipelines, and its processing would be absolutely crucial for the development of Offshore Wind Energy projects in India.
India has been working in the direction of establishing intergovernmental cooperation through bilateral agreements with European countries in order to develop a booming offshore wind market and related technical capabilities. For instance, in 2019, abilateral agreement was signed with Denmark (the place of installation of the first-ever offshore wind farm). This was reconfirmed in September 2020 with the establishment of a green strategic partnership. In furtherance of this, India and Denmark successfully launched the ‘Centre of Excellence on Offshore Wind’ with the aim of primarily working on spatial planning, financial framework conditions, supply chain infrastructure and standards and testing by inviting and including international governments and players for the purpose of gaining practical knowledge and experience offshore wind.
Given the lack of progress in the Offshore Wind Energy sector, it would be appropriate to conclude that the likelihood of India meeting its target of establishing 5 GW worth of offshore wind by 2022 is slim.The first 1 GW offshore wind tender in Gujarat has been delayed to an extreme extent, and the Government has severely underestimated the resources that would be required to set up a clear, stable tender and permitting process to attract investors to the market. That being said, it is still not too late to meet the 2030 target of installing 30 GW if rapid deployment takes place.
China’s Road to the Top
According to theGlobal Offshore Wind Report of 2021, China has installed 12.7GW of new offshore wind energy capacity in the year 2021. The global installed offshore wind capacity witnessed a steep rise from 32.5GW by the end of 2020 to 48.2GW by the end of 2021,an annual growth of 48.2%.
The same report further suggested the commencement of operation of 53 new offshore wind farms in 2021 worldwide (an aggregate of 16.9 GW), out of which 45 were installed in China alone, putting China in the position of having the world’s largest offshore wind market by far with19.7GW of installed capacity. China has been efficient in utilising its 18,000 km coastline borders which spreads over 3 million square kilometers and is quite favourable for the development of wind power generation. The country now has the largest fleet of offshore wind turbines in the world after the 2021 additions, state-owned CCTV reported, citing National Energy Administration data.
China’s journey was fueled primarily by national renewable energy policies. The firstRenewable Energy Law of 2006 with its implementation rules of 2007 significantly accelerated the growth of renewable energy. Until that time, there existed only marginal renewable energy technologies, but the new law came out with a proper legal framework for their efficient operation and development. The new legislation put major emphasis on encouraging grid companies to prioritise renewable energy over all other sources of power. The Shanghai Donghai Bridge offshore wind farm, which has a capacity of 102 MW, wasChina’s first offshore wind power demonstration project, and it started generating power in June 2010. It was also the first offshore wind project to exist outside Europe.
Chinese power companies looked at the potential opportunities and started drawing up plans for a series of demonstration projects to gain experience in offshore developments and prepare for the next tenders. By the year 2011, China ranked third globally after installing 242.5 MW through offshore demonstration plants after UK and Denmark. In 2010, the “Interim Measures for the Administration of Development and Construction of Offshore Wind Power” were published jointly by the National Energy Administration and the State Oceanic Administration. These guidelines further facilitated China’s offshore wind power development as they set out provisions for project approval procedures, as well as a list of criteria for project development and construction. Tender procedures were called out to be the preferred method of selecting offshore projects, and it was strictly stated that foreign investors could only hold a minority stake in offshore wind developments. China has set targets for offshore wind development of5GW by 2015 and 30 GW by 2020.
Chinaset its first tariff for coastal wind power in 2014. This was done at ahigher price than that coal power at that time (0.85 yuan per kilowatt hour in comparison to0.42 yuan). The growth of this sector should be attributed to the generous and reliable tariff. This made it possible for the National Energy Administration to publish a plan in 2016 for wind power development during the13th Five Year Plan, aiming at 10 GW of offshore wind power to be under construction or installed by 2020 and targeted at more than 5 GW of that to be connected to the grid. Guangdong, Jiangsu, Zhejiang and Fujian were constructed with the aim of at least 1 GW each.
With efforts like these, it must be noted that China was able to connect more offshore wind generation capacity last year than any other country in the world managed to install in the last five years. The nation now operatesalmost half of the world’s installed offshore wind, with 26 GW of a total of 54 GW worldwide. Needless to mention, this puts China in a league of its own. China’s ability to sustain itself and grow each year tremendously truly puts to fore the importance of self-sufficiency, while maintaining a healthy interaction with the Global Economy. More recently, in the wake of the Russia – Ukraine war, the need for a country to be self-sufficient in the energy sector has become even more prominent. This conflict has not only affected China but also other parts of the world, majorly EU; asit is dependent on Russia for 40% of its natural gas and a large part of its oil imports.The EU Commissioner Chief made her intentions clear of decreasing the dependence on Russia by putting in efforts towards boosting the investments in renewables, primarily wind and solar.
Offshore Wind Energy exists as one of the most futuristic ways of energy generation, which once implemented and thereafter utilized properly will deliver majorly to the requited energy crisis. India has been keenly eyeing its potential, but no substantial efforts have been made by the government, citing the tentative delay in achieving the 5 GW installed Offshore wind energy farms for the year 2022. India has been making progress on paper by signing bilateral treaties and setting up a Centre of Excellence on Offshore Wind in collaboration with Denmark to procure an understanding of the practicality and experience. But these efforts are in no way enough. The Government needs to catalyze this industry by attracting investors and developing infrastructure to meet its goals. This will also contribute to the renewable’s targets of the nation.
On the other hand, China’s journey in this sector is to be looked up to. The efficiency and pace China has adopted to facilitate the offshore power generation sector have left the world stunned. India and the Indian Government should peek over the border, observe and make efforts towards emulating China’s regimes in this sector for a bright future of Offshore Wind Energy in the country.
About the Authors
Mr. Rohana Khatana is an Independent Practitioner, Litigation, Delhi.
Ms. Swadha Sharma is a 3rd Year Law Student from University School of Law & Legal Studies (USLLS), Guru Gobind Singh Indraprastha University (GGSIPU) at New Delhi. She is also an Associate Editor at IJPIEL.
Managing Editor: Naman Anand
Editors-in-Chief: Jhalak Srivastav and Muskaan Singh
Senior Editor: Hamna Viriyam
Associate Editor: Swadha Sharma
Junior Editor: Sukrut Khandekar
Preferred Method of Citation
Rohana Khatana and Swadha Sharma, “The Wave of Offshore Wind Energy: From India’s Low Tide to China’s High Tide” (IJPIEL, 9 May 2022)