India scraps huge offshore wind tenders as global giants steer clear
Analysts say 'writing on the wall' for process that was supposed to kick start sector in key Asian market
India has cancelled two major tenders designed to kick-start its offshore wind industry amid reported disinterest from developers.
No reason was given by SECI for the moves, but local media reported the tenders had been pulled after lack of interest from developers.
One of the sources told the Indian news outlet that tendering could be revived although no decision had been taken.
The news is a major blow to India’s long-held ambitions to create an offshore wind sector to match its status as a major onshore wind market. Gujarat and the southern state of Tamil Nadu had both been earmarked as suitable for development of up to 7GW.
Those ambitions kicked off in earnest in 2018 when India set a 5GW goal for 2022 and 30GW target by 2030, after an early expression of interest process saw a 'who’s who' of global developers respond.
The sector has since seen a succession of false starts despite wind forming a targeted 140GW of the push to install 500GW of non-fossil capacity by 2030, a key policy of Prime Minister Narendra Modi.
The 4GW of seabed leasing and Gujarat tender that kicked off last year were supposed to definitively spark the sector into life, helped by ‘viability gap funding’ support from the Indian government designed to square the circle of high offshore wind costs and the availability of abundant cheap onshore renewables.
For the Gujarat tender, SECI was offering to enter a 25-year Power Purchase Agreement with the successful bidder, with a tariff of 4,500 rupees/MWh ($51.4/MWh).
However, analysts immediately questioned whether the terms on offer would be enough.
Jain added: “Wind and offshore wind will play a critical role in stabilising the grid. The government is committed to Net Zero by 2070 and many companies want to reach net zero by 2040. They will require bulk renewable power and offshore wind provides an excellent solution.
“However, the nascent industry needs support. We believe that all stakeholders will go back to the drawing board and a new auction mechanism needs to come out to help the build out of the industry.”
Umang Mehrotra, a senior offshore wind analyst at Rystad, wrote on Linkedin that the cancellation shows how developers are adopting a “wait and watch” approach to new markets.
“While it’s a setback for India's offshore wind ambitions, it's also a reminder that we need realistic pricing, investor confidence, and strong policy support to turn vision into reality.”
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