Viability Gap Funding (VGF) Scheme:
The Union Cabinet has recently approved the Viability Gap Funding (VGF) scheme for offshore wind energy projects with a total outlay of Rs.7453 crore.
- The scheme includes the installation and commissioning of 1 GW (Gigawatt) of offshore wind energy projects with an outlay of Rs. 6853 crore, featuring 500 MW wind energy projects off the coasts of Gujarat and Tamil Nadu.
- Offshore wind is a source of renewable energy which offers several advantages such as higher adequacy & reliability, lower storage requirement.
- The VGF scheme, overseen by the Ministry of New and Renewable Energy, is a major step towards implementing the National Offshore Wind Energy Policy notified in 2015.
- VGF is a government grant of up to 40% of the total project cost, provided to support infrastructure projects that are economically justified but not financially viable.
- The VGF support from the Government will reduce the cost of power from offshore wind projects and make them viable for purchase by Distribution Companies (DISCOMs).
