Odisha is a highly industrialised state and in the upcoming years, a steady rise in energy consumption from all sectors is anticipated. The state is endowed with a vast potential of largely untapped renewable energy. Due to renewable purchase obligations and net-zero commitments, there is a clear demand for renewable energy from discoms and the industry in the state. Therefore, the Odisha government has formulated a new renewable energy policy, the Odisha Renewable Energy Policy 2022, with the primary objective of creating an environment, which would allow the state to fully utilise its renewable energy potential through government, private sector and individual initiatives. The policy will last until March 31, 2030, or until the state government announces a new policy.
The Odisha Renewable Energy Policy 2022 aims to hasten the adoption of clean energy alternatives and decarbonise the energy sector, which comprises both captive industrial consumers in the state and grid-based power consumption. The aim of encouraging the development of green energy projects in the state is to maximise the use of existing resources and the state’s potential for clean energy. The target is to bolster investment in the clean energy industry, foster job opportunities and develop the state’s economy. The policy intends to promote solar parks with a minimum capacity of 25 MW to reduce the cost of generation and associated infrastructure. The Odisha government will support the installation of grid-connected rooftop solar PV projects on residential homes, commercial buildings, industrial establishments and government facilities. Furthermore, the Odisha Renewable Energy Development Agency will aggregate demand from different government departments and conduct bids to facilitate rooftop solar deployment on government buildings. In addition, the policy aims to reduce the carbon footprint of electric vehicles (EVs) by providing access solar electricity for EV charging.
The Odisha government will grant captive and open access consumers of renewable energy, as well as energy storage projects, a concession of Rs 0.50 per kWh on electricity duty. It will be available for 15 years following the completion of the projects. The cross-subsidy surcharge would also be subject to a 50 per cent exemption for 15 years following the projects’ commissioning dates. In addition, the state transmission utility (STU) fees will be waived for 15 years at a rate of Rs 0.20 per kWh. Additionally, the policy offers a 25 per cent reduction in wheeling charges when using energy from projects that have been in operation in the state for 15 years.
The Odisha Renewable Energy Policy, 2022, has provisions that aim at creating an enabling environment for prospective wind power plant developers to harness the available quantum of wind power in the best possible manner. Due to the Ministry of Power’s most recent RPO notification, which outlined a trajectory for the Wind Power Obligation up to 2029–2030, the development of wind-based energy projects is anticipated to pick up steam in the following years. Given the state’s limited wind potential, the nodal agency may allocate the development of wind power plants on a first-come, first-served basis, subject to the approval of the population in the vicinity of the project.
The state has an estimated 3,314 MW of large hydro potential. Under the policy, the nodal agency will hold a competitive bid process to select developers to carry out the listed large hydro projects in case the project is not awarded to any public sector entities or their joint ventures. Furthermore, Grid Corporation of Odisha will procure the full power from projects at the tariff determined by the Odisha Electricity Regulatory Commission. The pumped hydro projects will be eligible for viability gap support from the central or state governments, according to government regulations. The policy will also encourage the use of biodegradable waste for the generation of electricity to enable the development of waste-to-energy projects in the state. Moreover, the state government is considering the development of green hydrogen and green ammonia hubs to address the demands of industries, long-haul transportation, city gas distribution, as well as export.
Outlook
The renewable energy industry in Odisha has not grown in the past due to a number challenges that must be addressed through innovative land policy, stronger incentives and procurement measures. Hence, the government has formulated a new renewable energy policy to facilitate the development of commercially viable projects across multiple renewable energy technologies. Along with facilitating participation from the private sector and central public sector undertakings, the state government aims to encourage state-sector power utilities to enter into renewable energy production using a variety of technologies. All these provisions are expected to help in expanding the market for renewable energy in the state.
By Anusshka Duggal
