India steps up offshore plans as election looms

Thus far, offshore wind development has been largely concentrated in Europe, with emerging markets such as Taiwan and the US. But recent stirrings in India, already the fourth largest onshore wind market in the world with just shy of 35GW of capacity installed, indicate that a new player is entering the game.

In June of this year, the Indian government announced that it wanted to support the development of 5GW of wind farms in its waters by 2022, ramping up to 30GW by 2030. To kick-start the process, it has been pushing ahead with plans for two initial offshore wind farms - with total capacity as yet undecided - starting with the 1GW First Offshore Wind Project of India (FOWPI).

FOWPI is set to be situated off the coast of Gujarat, near the Pakistani border on the country’s west coast. Thirty-four parties expressed their interest in developing the project, including established names such as Ørsted and Equinor – and the government is due to give more clarity on the development process and timetable in early October. All being well, FOWPI is set to be followed by a project in the waters off the coast of the southern state of Tamil Nadu.

It’s easy to see why FOWPI has attracted such interest from European investors. With 17% of Indian households lacking electricity, and a growing middle class, India has an increasing appetite for power that offers good opportunities for the developers of new energy projects.

Meanwhile, low-cost Indian manufacturing already supports a successful solar and onshore wind market, with many components made locally. This could be attractive for offshore wind project investors if those savings can be rolled out to the offshore sector - although, with a lack of a track record, that is far from certain.

So far, so promising. However, Indian offshore wind is not without its challenges.

“It’s become clear in the last two to three years that wind speeds in India can’t compete with those in the North Sea,” says Charles Yates, founder of CmY Consultants Limited, who spent four years advising the Indian government on its offshore wind policy. Yates says the Indian market may need customised turbines with longer blades to optimise projects.

Meanwhile – like in fellow emerging market Taiwan – companies working offshore in India would need to contend with the risks introduced by extreme weather such as typhoons. Manufacturers MHI Vestas and Siemens Gamesa have announced plans to develop ‘typhoon ready’ turbines in preparation for the Taiwanese market, and this technology will be needed in India too.

Finally, there are political and regulatory challenges. There have been worries from Indian officials that the proximity of FOWPI to the Pakistani border would leave the project vulnerable to politically motivated crime.

There is also the uncertainty caused by the country’s upcoming general election. Prime Minister Narendra Modi and his Bharatiya Janata Party are favourites to retain power but Yates says that, if they were to lose out to the Congress Party, “there is a real risk that the offshore wind programme will stagnate”.

Despite these challenges, India is a promising offshore market for developers and investors. The interest shown by experienced global players show that the Indian government should be confident that it can meet its short-term offshore goals.

If you ask us, India is the next offshore wind market to watch.