The Cabinet of the Government of India has approved the National Offshore Wind Energy Policy on 9 September 2015. The policy aims to promote the development of offshore wind power projects. Some of the key features of the policy include designation of the National Institute of Wind Energy as the principal agency, allocation of blocks through a competitive bidding process, upfront submission of decommissioning programmes by developers, development of offshore evacuation infrastructure by developers and fiscal incentives available to projects.
On 9 September 2015, the Cabinet of the Government of India approved the National Offshore Wind Energy Policy (Policy). The draft of the Policy was issued by the Ministry of New and Renewable Energy in 2013.
The Policy aims to promote the development of offshore wind farms up to 200 nautical miles from the coast line, an area designated as the Exclusive Economic Zone (EEZ). The key features of the draft Policy are as follows:
(a) Principal Agency - The National Institute of Wind Energy (NIWE) has been designated as the principal agency for the development of offshore wind power projects. Its primary functions will include approving the certificate of commencement of operations, undertaking the preliminary resource assessment, environmental impact assessment and oceanographic surveys in the EEZ and granting of single-window clearances to developers.
(b) Allocation of Blocks - Blocks will be allocated to potential developers through a competitive bidding process. Selected bidders will execute sea bed lease agreements with NIWE. The lease agreements will provide for automatic reversion of allocated blocks to the government if developers are unable to achieve commercial operations for their projects within a specified time.
(c) Decommissioning Programme - Selected bidders will be required to submit a decommissioning programme to NIWE upfront, as part of the application process, and it will be approved before the sea bed lease agreement is executed.
(d) Off-take Arrangements - NIWE or State-owned off-taking companies will execute power purchase agreements with developers in accordance with the regulations of the Central Electricity Regulatory Commission or the State Electricity Regulatory Commissions.
(e) Evacuation Infrastructure – Transmission utilities owned by the State Government or the Central Government will provide the onshore infrastructure required to evacuate power generated by offshore wind power projects. Offshore power evacuation infrastructure up to the first onshore substation will have to be constructed by developers at their own cost.
(f) Fiscal Incentives - Offshore wind power projects will be eligible for fiscal incentives such as a ten-year tax holiday under the Income Tax Act, 1960, customs and excise duty exemptions on manufacturing and importing equipment and exemption from service tax on third party services relating to resource assessment, environmental impact assessment and oceanographic studies and use of survey and installation vessels.
(g) Security of Projects - Developers will be responsible for the security of offshore wind power projects and will assume the risk of uncertain geological conditions, specifically while designing the foundations for turbines to be installed in the sea bed.
In addition to the above, the Government may invite proposals for development of demonstration projects in specified blocks. Such projects will be exempted from payment of lease rent for a specified period during which they will be operated and maintained by developers and thereafter, transferred to the Government.
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