NTPC, ONGC To Focus On Offshore Wind Energy Developments ?

Highlights :

  • NTPC and ONGC have signed an MOU to work on offshore together
  • The two PSU’s seek to combine their expertise in offshore work (for ONGC) with generation and transmission (NTPC)
  • Offshore wind needs support in India as it is highly capital intensive, and has higher technology and maintainance demands.

News reports have quoted state-owned National Thermal Power Corporation Ltd (NTPC) and the Oil and Natural Gas Corporation Limited (ONGC)  joining together for the development of offshore wind energy in the country. For ONGC, the national oil explorer, any tie-up is considered  relevant as power generation has not been its forte, and offshore wind offers it an opportunity to put its expertise of working at sea to use. Like many other global oil firms, at some stage, one can expect ONGC to declare serious green hydrogen plans too, as that allows for the use of many aspects of technology from oil exploration and processing.

With energy PSU’s taking on a major role of heling the government achieve its renewable energy commitments, it has been common to see them get together to move ahead. That can be due to both their relative lack of experience in the renewables space, and the unwillingness to bear the high capital expenses alone.

NTPC, as the largest and most experienced PSU in the energy space, has multiple agreements or MOU’s in place, from Coal India limited to ONGC.  ONGC, till date, has not really made any aggressive play in utility scale solar, preferring to go with rooftop solar at various locations for now.

With NTPC declaring a  revised 60 GW renewable energy target by 2032, one has to wonder if this will include offshore wind or it was all solar. As the energy sector transitions at a pace that is only picking up,  wind energy, which follows its own rhythm unlike solar energy in the daytime, offers a good prospect to maintain a more even supply from renewables . It doesn’t hurt at all that some of the most attractive states for solar energy also offer strong wind energy prospects, especially coastal states like Karnataka, Andhra Pradesh etc. The possibility of major wind energy expansion in states like Rajasthan Madhya Pradesh and even Maharashtra has ebbed in recent years, as  fresh data has cast doubts on the viability of onshore wind in many areas. However, repowering remains a very attractive prospect , if given policy a push.

In May last year, both organizations had signed a Memorandum of Unity (MoU) to achieve their targets in the renewable energy business. Under that MoU, NTPC and ONGC would explore and set up renewable power assets including offshore wind, in India and overseas, and explore opportunities in the fields of sustainability, storage, e-mobility, and ESG (Environmental, Social and Governance) compliant projects.  e country and also safety aspects.

India’s total wind capacity was standing at 34.98 GWs as of October 2018, the fourth position in the world with over 38.789 GW of installed wind capacity having a target of 60 GW by 2022. Out of which, 5 GW will be from offshore wind installations only, according to MNRE’s medium- and long-term targets for off-shore wind power capacity by 2022 and 30 GW to be added by 2030.

Under the National Offshore Wind Energy Policy approved in 2015 the Ministry of New & Renewable Energy (MNRE) has been authorized as the Nodal Ministry for use of offshore areas within the Exclusive Economic Zone (EEZ). At this stage, an expression of Interest (EoI) inviting the bidders for the development of the first 1000MW commercial-scale offshore windfarm in India, near the coast of Gujarat is the only one in the pipeline for offshore. Thus, the 5 GW target won’t happen certainly, but the longer term target of 30 GW is not impossible, given how quickly offshore costs have also eased in recent years. Importantly, this sector is not dominated by Chinese players (yet)  being led by European and American manufacturers, besides a sizeable domestic ecosystem too.

The GWEC (Global Wind Energy Council), a body of wind energy players, has predicted offshore wind energy capacity creation of 205 GW to 2030, to take global offshore wind capacity to 234 GW, from the current 34 GW.

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