The announcement came during a side event of the Energy Transition Working Group (ETWG), which falls under the Sherpa Track of the G20. The new renewable purchase obligation (RPO) trajectory announced in July 2022 features a dedicated wind RPO for projects commissioned after March 31, 2022. It also features an energy storage obligation (ESO). A balanced mix of renewables and storage is essential as the share of renewables (including hydro) has crossed 40 per cent of installed capacity.
Given that offshore wind is an expensive technology, viability gap funding (VGF) will be on offer. Bidders with the lowest VGF bids will win capacity, which is then expected to be sold to off-takers. Tamil Nadu and Gujarat are reportedly willing to purchase power at INR 4.0 per unit.
At what price will VGF eventually come in? That will indicate the actual cost of offshore wind.