MNRE Introduces Amendments To Offshore Wind Energy Lease Rules, 2023

Posted On - 6 November, 2024 • By - King Stubb & Kasiva

Introduction

The Ministry of New and Renewable Energy (MNRE) has taken significant strides in facilitating the development of offshore wind energy projects through the establishment of the “Offshore Wind Energy Lease Rules, 2023.”[1] These rules provide a framework for leasing offshore areas within India’s territorial waters and Exclusive Economic Zones (EEZ) for the development of offshore wind projects. Recently, in September 2024, the MNRE issued a circular introducing amendments to these rules, with the aim of further streamlining the leasing process and clarifying certain provisions.

Explanation

The key points of the amendments to the Offshore Wind Energy Lease Rules, 2023, are as follows:

  1. Definition of Lease (Clause 2(i)):

The amendment redefines the term “Lease” as an agreement that grants rights over the seabed within the territorial waters and EEZ of India to a lessee, with the central government acting as the granting authority. This lease is provided for a fixed term, subject to payment by the lessee. The modification emphasizes the geographical scope and authority of the central government in the leasing process, ensuring clarity on jurisdiction.

  1. Offshore Wind Energy Project Definition (Clause 2(m)):

The scope of offshore wind energy projects has been expanded to include not only wind turbines but also auxiliary components like offshore pooling substations, arrays of offshore cables (both intra and inter-array), and power-generating systems that harness other renewable sources to meet auxiliary energy needs. This change highlights the government’s intent to support the development of comprehensive and multi-faceted energy systems in offshore environments.

  1. Leasing of Offshore Areas (Clause 5(1)):

The amendment details the process for leasing offshore areas. The central government will identify areas suitable for wind energy projects through wind resource assessments and marine spatial planning. It will oversee the selection process for lessees in accordance with the National Offshore Wind Energy Policy. The amendment also mandates obtaining clearances from several key ministries—Defence, Home Affairs, External Affairs, Environment, Forest and Climate Change, Space, and Ports, Shipping, and Waterways—before granting a lease. This ensures that national security, environmental considerations, and regulatory requirements are respected.

  1. Lease Term (Clause 8(2)):

The amendment extends the lease term for offshore wind energy projects to 35 years, with the possibility of further extension based on project viability and safety. This provides long-term security for investors and developers, making offshore wind projects more attractive by ensuring stable operational periods.

  1. Transfer or Assignment of Lease (Clause 11):

The new amendment restricts the lessee from transferring or assigning their lease rights without prior written consent from the central government. This change is likely intended to maintain government control over the use of India’s territorial waters and EEZ, preventing unauthorized or unregulated transfers of strategic assets.

  1. Regulation of Operations (Clause 18):

The amendment clarifies that all aspects of offshore wind projects—study, survey, construction, installation, commissioning, and operation and maintenance—must be conducted in line with the technical standards and guidelines issued by the central government. This regulation ensures that all projects adhere to national safety, environmental, and technical standards, thereby protecting national interests and environmental sustainability.

Conclusion

The amendments to the Offshore Wind Energy Lease Rules, 2023, are a critical step towards enhancing the clarity, efficiency, and regulation of offshore wind energy projects in India. By providing clear definitions, extending lease terms, and ensuring that projects meet strict technical and environmental standards, the central government is promoting the growth of offshore wind energy while safeguarding national security and environmental concerns. These amendments are a reflection of India’s commitment to expanding its renewable energy capacity, reducing its reliance on fossil fuels, and achieving its clean energy targets.

[1]https://cdnbbsr.s3waas.gov.in/s3716e1b8c6cd17b771da77391355749f3/uploads/2024/09/202409301555658992.pdf