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Suzlon’s offshore wind pilot in Gujarat to cost Rs 6,000 crore

According to reports, wind turbine manufacturer Suzlon Energy Limited is planning to invest about Rs 6,000 crore on India’s first offshore windmill project in bay of Kutch in Gujarat. The work on the 600-Mw project, to be set up on a pilot basis, will start early next year. Suzlon is already conducting a techno-commercial feasibility study for the offshore project. However, the company is taking regulatory hurdles and policy framework into consideration, even as it plans to complete the pilot project in the next three to five years.

“Offshore windmill projects require more capex as compared to onshore ones, with investments being almost 2.5 times that of onshore. We estimate the project cost to be around Rs 6,000 crore, though it is too preliminary to talk about the financials at this moment,” said Tulsi Tanti, chairman of Suzlon Group. Tanti, however, said energy production from offshore is also double of what is produced from onshore.

“Compared to onshore, offshore projects will have significantly higher capacity factor. Suzlon already has mature offshore technology available with itself. Further, with offshore, you can grow in scale, which can also add to its competitiveness against onshore. While the cost of offshore wind projects is still high, it can certainly be brought down substantially through economics of scale,” Tanti added.

According to the company, the economically feasible potential in the West Coast for offshore is nearly 90,000 Mw and in the South Coast is nearly 120,000 Mw totalling 210,000 Mw in these regions. Moreover, offshore enables larger wind energy projects, leading to potential for building 1,000 Mw to 2,000 Mw facilities. Additionally, the capacity factor of such projects can range from 30-45 per cent.

Senvion SE, which was recently sold by Suzlon, enjoys leadership in the offshore wind energy segment. Senvion introduced its multi-megawatt offshore turbines 10 years ago and has installed more than 130 such turbines offshore. In the past, Senvion has completed one of the largest offshore wind farms in Europe for a total cost of ^1.3 billion. On the tariff front, while currently there is no estimation for off-shore wind energy projects, the same is expected to be available once the pre-feasiblity reports are done. Following this, an attempt to calculate the preferential tariff for an offshore wind energy project can be done, the company stated.

“In the last few months, the government’s decision to continue with policies such as accelerated depreciation (AD) and generation-based incentive (GBI) is a positive move and will certainly speed up the development of wind energy projects in India, even as it opens up the offshore wind sector,” Tanti said.

Currently, Suzlon’s global spread extends across Asia, Australia, Europe, Africa and North and South America with cumulative installations of 15 gigawatt (Gw) across 19 countries. The group has over 8,600 Mw cumulative installed base in India and is developing one of Asia’s largest wind farms in the western Indian state of Gujarat and Rajasthan. The Kutch wind farm and Jaisalmer wind farm have till date cumulative installation of over 1,100 Mw each.

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