The Union Cabinet, chaired by the Prime Minister, recently approved the Viability Gap Funding (VGF) scheme to support the development of India’s first offshore wind energy projects.
About Viability Gap Funding:
- The primary goal of the VGF scheme is to support the development of offshore wind energy projects by reducing the financial risks and uncertainties associated with such ventures.
- This is achieved by providing financial assistance to private developers to make their projects economically viable.
Key Features
- Nodal Ministry: Ministry of New and Renewable Energy (MNRE) is responsible for the oversight and implementation of the VGF scheme.
- Private Sector Involvement:
- Private Developers: Tasked with establishing offshore wind energy projects.
- The scheme encourages private sector participation to drive innovation, efficiency, and cost-effectiveness in the development of offshore wind farms.
- Transmission Infrastructure:
- Power Grid Corporation of India Ltd. (PGCIL): Entrusted with the development of essential transmission infrastructure.
- Responsibilities include the construction of offshore substations and other necessary facilities to connect offshore wind farms to the national grid.
- Support for the National Offshore Wind Energy Policy, 2015:
- The VGF scheme aligns with the objectives of the National Offshore Wind Energy Policy, 2015, which seeks to explore and promote the deployment of offshore wind energy resources in India.
- The policy framework encourages the utilization of offshore wind potential to contribute to the country’s renewable energy targets.
- Significance
- Economic Viability: The VGF scheme makes offshore wind projects financially viable by bridging the gap between project costs and revenue potential.
- Renewable Energy Goals: Supports India’s commitment to increasing its renewable energy capacity, thereby reducing reliance on fossil fuels and enhancing energy security.
- Technological Advancement: Promotes the adoption of advanced offshore wind technologies and best practices.
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