Leased areas for offshore wind energy projects will be valid for an initial three-year period for conducting resource measurements and surveys, according to the Offshore Wind Energy Lease Rules, 2023, issued by the Ministry of External Affairs.

The lease period can be extended by an additional two years. All clearances will be revoked after the five-year lease period expires.

The lessee must submit study or survey data to the National Institute of Wind Energy unless it has commenced setting up wind energy capacity as per the lease terms.

For the construction and operation of offshore wind energy projects, the lease can be extended for 35 years, with the possibility of further extensions on a case-by-case basis, considering the project’s operational viability and safety.

The leased area can range from 25 to 500 square kilometers, depending on the project size.

Deposit and Fees

To set up and commission an offshore wind energy project, the applicant must deposit ₹100,000 ($1,201) per MW. For a separate offshore wind transmission project, the deposit is ₹50,000 ($600) per MW to the central government within three months from the letter of demand.

The security deposit will be refunded to the applicant after the successful operation of the offshore wind energy project and its decommissioning at the end of the lease agreement.

Additionally, the applicant must pay an annual lease fee of ₹100,000 (~$1,201) for each square kilometer or part thereof covered by the lease.

This fee must be deposited within one month of receiving a demand letter from the lease issuing authority.

The lessee can give a 30-day notice to the central government if it wants to give up the entire or part of the leased area. It must pay the yearly lease fee for the next five years or until the lease ends, whichever comes first.

If only part of the leased area is used for a project, and the entire project capacity is completed, the unused part of the area can be given up with a 30-day notice, and the lease fee for the next 30 days or until the lease period ends, whichever is sooner, must be paid.

Identification of Areas

The lessee must install notices or markers at visible points throughout the leased area to indicate its boundaries within three months of the lease’s effect. Throughout the lease duration, the lessee must maintain these notices or markers to the satisfaction of the central government and other stakeholders.

Lessee Rights

The lessee possesses the right to utilize waterways for offshore wind or transmission activities as required.

The lessee can enforce restrictions, including:

• • Notifying entry restrictions into designated lease areas for specific periods specified by the central government for the offshore wind farm’s construction, operation, and maintenance.
  • Navigation of boats, ferries, and ships that obstruct the operation of the project site.
  • Regulating navigation within fifty meters for the foundation and five hundred for the substation.
  • Prohibition of anchoring or using fixed fishing gear within designated lease areas.
  • Managing activities such as scuba diving, windsurfing, kiting, etc., within designated lease areas.

• Notifying entry restrictions into designated lease areas for specific periods specified by the central government for the offshore wind farm’s construction, operation, and maintenance.
• Navigation of boats, ferries, and ships that obstruct the operation of the project site.
• Regulating navigation within fifty meters for the foundation and five hundred for the substation.
• Prohibition of anchoring or using fixed fishing gear within designated lease areas.
• Managing activities such as scuba diving, windsurfing, kiting, etc., within designated lease areas.

Certain activities, like fishing for livelihood and others compatible with the offshore wind energy farm’s operation and public interest, may be allowed, provided they do not disrupt the wind farm’s normal functioning.

The lessee cannot explore or extract minerals, materials, or resources from the seabed, subsoil, or adjacent waters. Their rights are limited to activities related to offshore wind power generation.

Additionally, subleasing any part of the lease is not allowed without approval from the central government.

Payment Default

Failure to make payments on time will result in a monthly penalty of 5%, accruing on a pro-rata basis for each month or part of the fees or payments remaining unpaid.

If a lease fee or other payment remains overdue for more than three months, the central government may cancel the lease, and the cancellation will be effective upon publication in the Official Gazette.

Decommissioning

The lessee is obligated to dismantle all installations and remove obstacles from the seabed resulting from the project. Decommissioning must be finalized within two years of the lease termination, and all removed materials should be either repurposed, recycled, or responsibly disposed of.

The central government will provide specific guidelines for the decommissioning process of offshore wind projects.

The lessee must remove or dispose of all offshore wind energy project components, including turbines, equipment, machinery, cables, and civil infrastructures, within two years of lease termination.

The Indian Coast Guard is empowered to board, inspect, and check documents at wind farms, such as licenses and photo identification of the personnel, make copies as necessary, and on suspicion, detain personnel and seize material for further investigation or action as per applicable laws.

Lease cancellation

The lease will be canceled if, at any point, the lessee does any of the following:

• Violates the terms and conditions of the lease or does not follow any of the terms.
• Does not use the leased area for the intended purpose within the lease period.
• Uses the area for something other than what was initially agreed upon.
• Causes significant and irreversible environmental harm, particularly to plants and animals.
• Fails to provide the necessary documents related to the project.

In November, the National Institute of Wind Energy floated a tender for offshore geophysical and geotechnical investigations at different offshore wind sites in sub-zone-1, Gulf of Mannar, off the Tamil Nadu coast.

The Ministry of New and Renewable Energy announced it would hold auctions for offshore wind sites along the Tamil Nadu coastline, with the National Institute of Wind Energy overseeing them. The first zone (B) is set to be tendered by February 1, 2023.