MNRE Amends Offshore Wind Lease Rules To Ease Process

The Ministry of New and Renewable Energy (MNRE) recently announced an draft amendment to the offshore wind energy lease rules, aimed at regulating the leasing of offshore areas for wind energy projects. The government can now grant leases for up to 35 years, with the possibility of extending them on a case-by-case basis, depending on functional viability and safety considerations.

In 2023, MNRE initially laid the initial ground for setting up the offshore wind energy policy. This policy laid the groundwork for the grant of lease for setting up wind energy capacity. It specified guidelines for the identification of areas for setting up offshore wind projects, and decommissioning of the project, in case of default in payment, dispute settlement mechanism, etc.

The new rules released by MNRE in 2024 revised certain provisions of the 2023 regulation to better define and regulate the leasing process for offshore wind energy projects. The key change made to Clause 2(i), clarified the definition of a “lease.” MNRE now defines a lease as an agreement that grants rights over the seabed within territorial waters and the Exclusive Economic Zone (EEZ) to a lessee, for a fixed term, in exchange for payment.

The draft amendment also updates the definition of offshore wind energy to describe it as a complete system. This includes wind turbines, offshore substations, an array of wind cables (both intra- and inter-array), and a power generation system that may also incorporate other renewable energy sources. These systems are designed to meet auxiliary power needs and are deployed on either fixed or floating foundations in the natural sea environment, within territorial waters, or in the Exclusive Economic Zone (EEZ).

The regulation further enables the central government to lease offshore areas within territorial waters and the EEZ for the development of wind energy and transmission projects.

Amendment To Lease Procurement System

To facilitate the leasing process, the government will now identify suitable offshore areas based on resource assessments and spatial planning. Lessees will be selected through a process outlined in the offshore wind energy policy. Additionally, the licensees are now required to get approval from various government authorities to get the license, it includes getting approval from entities such as the Ministry of Defence, Ministry of Home Affairs, Ministry of External Affairs, Ministry of Environment, Forest and Climate Change, Department of Space, and Ministry of Ports, Shipping, and Waterways.

Transfer Of Lease Rights

MNRE in its draft amendment introduced two new clauses related to the transfer of lease rights and the regulation of operations. Under these rules, lessees cannot transfer their rights without written consent from the central government. Additionally, it placed a mandate on the central government to oversee the entire process—from studies and surveys to construction, installation, commissioning, operation, and maintenance of offshore wind energy projects—under technical standards and government instructions.