By Nidhi Dua
Odisha’s power sector has continued its momentum of steady expansion, especially in recent years, driven by rising industrial activity and growing electricity demand across the state. As of November 2025, Odisha’s total installed power capacity stood at 9,117.87MW, which includes 5,972.47 MW of thermal power, as reported by the Central Electricity Authority. According to data from the Ministry of New and Renewable Energy (MNRE), the state’s installed renewable energy capacity reached 3,120.72 MW as of November 2025. This installed renewable capacity comprises a considerably diverse mix of 140.63 MW of small hydro, 64.22 MW of biopower and 761.32 MW of solar power. Of the total installed renewable capacity, large hydro remains the biggest contributor, accounting for 2,154.55 MW. Odisha’s solar portfolio includes 574.5 MW of ground-mounted solar, 128.3 MW of rooftop solar installations (including those under the PM Surya Ghar: Muft Bijli Yojana) and 58.52 MW off-grid/PM KUSUM Component B. The state’s biopower capacity is further divided into 50.40 MW of biomass power/bagasse cogeneration and 8.82 MW of biomass cogeneration (non-bagasse).
Renewable Watch takes a look at the state’s renewable energy landscape, examining recent project developments, the challenges faced by developers and the road ahead…
Solar landscape
Odisha’s progress in solar development has been steady but remains modest compared to other states. According to a Lok Sabha response from August 2025, the state has only one sanctioned solar park under the Scheme for Development of Solar Parks and Ultra Mega Power Projects. This park has a sanctioned capacity of 40 MW and ranks among the smallest sanctioned capacities under the scheme.
Furthermore, the uptake of rooftop solar under the PM Surya Ghar scheme has also been limited. As per the scheme’s official portal, Odisha has received 168,647 applications, of which 23,774 installations have been completed, reflecting a conversion rate of roughly 14 per cent. Despite this modest rate, Odisha holds one of the highest numbers of installations in the eastern region. The total installed capacity under the PM Surya Ghar scheme in the state currently stands at 77.42 MW, with subsidies of approximately Rs 1.51 billion released so far. To accelerate adoption, the state approved a consumer-owned Utility-Led Aggregation (ULA) model in December 2025, for installing 150,000 rooftop systems of 1 kW each, expected to benefit nearly 0.7 million-0.8 million people, particularly from economically weaker households.
Additionally, performance under the PM-KUSUM scheme remains mixed. As of December 2025, under Component A of the scheme, while 90 MW has been sanctioned, no installations have taken place yet. Meanwhile, under Component B, 16,441 pumps have been sanctioned and 10,113 have been installed. In contrast, under Component C (feeder-level solarisation), 5,223 pumps have been sanctioned, but none have been installed so far.
Recognising land-related constraints for solar projects, Odisha has also begun diversifying into floating solar. In January 2025, aligned with the Odisha Renewable Energy Policy (OREP) 2022, the state government issued operational guidelines for floating solar PV projects. In the first phase, Odisha has identified over 5,000 MW of floating solar potential. In this space, in December 2025, the state cleared projects worth approximately Rs 7.1 billion to be developed by NTPC-SAIL Power Company Limited at Sundargarh.
Odisha’s solar sector shows a mixed picture, with clear intent and recent policy momentum, but limited on-ground progress in major schemes and park development. The new floating-solar focus and ULA-driven rooftop expansion could, however, mark a turning point if implemented effectively.
Hydropower and PSP ambitions
As per the MNRE data as of November 2025, Odisha has the highest installed capacity of small and large hydropower in the eastern region. The state has identified 185 small hydroelectric projects with a combined potential of 1,104,720 kW, highlighting the significant scope for further capacity addition. A key recent development in this space is the tender issued by GRIDCO Limited in July 2025, to select developers for setting up small hydropower projects in Odisha, having a cumulative capacity of 93.95 MW and for the supply of energy to GRIDCO.
On the pumped storage project (PSP) front, Odisha has released its PSP policy in July 2025, identifying 45 potential sites for project development. The policy offers several incentives, including exemption from electricity duty and cross-subsidy surcharge on renewable input energy. Further, under the policy, projects are eligible for budgetary support from the central government under relevant schemes, as well as viability gap funding for installations supplying power to distribution companies (discoms). The policy is also aligned with OREP 2022, enabling developers to access all OREP 2022 benefits when renewable input energy is sourced from within the state. The 45 identified sites have an aggregate potential exceeding 34 GW and comprise a mix of off-stream open-loop and off-stream closed-loop systems across multiple districts.
The deployment of PSPs in Odisha is expected to play a key role in firming intermittent renewable power. These projects can provide frequency regulation, ramping support and seasonal energy shifting. Odisha is well-positioned to leverage this opportunity due to its extensive network of multipurpose dams and favourable topography for pumped storage development. Several existing reservoirs are technically suitable for conversion or augmentation into pumped storage systems, offering both cost and environmental advantages over greenfield projects.
Growth potential in bioenergy sector
Odisha possesses a strong biomass resource base, positioning it well for expanded bioenergy development. As per the NITI Aayog’s India Climate and Energy Dashboard, the state has an estimated biomass potential of 299 MW, and despite having one of the lowest installed biopower capacities in the eastern region, it records the highest utilisation rate of its potential among peer states. District-level assessments by the Indian Institute of Science, Bengaluru, further reinforce this resource strength. During the Kharif season, Odisha produces 17,140.90 kt of biomass annually, with a surplus of 3,155.90 kt, while in the Rabi season, the production stands at 2,436.90 kt, generating a surplus of 439.04 kt. Such a surplus indicates a robust feedstock supply that could support a larger bioenergy footprint.
However, the state’s current project ecosystem does not reflect this potential. According to the GOBARdhan portal, Odisha has only two registered biogas plants, with one operational and the other yet to begin construction. The limited development is further reflected in data shared in Lok Sabha responses in August 2025. Under the MNRE’s Biogas Programme, the state has added only 216 small biogas plants (ranging from 1-25 m³ biogas generation per day) over 2022-23 to 2024-25. Progress on larger systems has also been limited with only one medium biogas project (ranging from 25-2,500 m³ biogas generation per day) set up under MNRE’s Biogas Programme. Furthermore, the state has only one large project (above 2,500 m³ biogas generation per day) commissioned under MNRE’s Waste to Energy programme.
Even so, there are early signs of renewed institutional focus. In December 2025, the Odisha government entered into an agreement with Oil India Limited to accelerate the roll-out of waste-to-energy facilities across the state. Overall, Odisha presents a contrasting picture of a state with abundant biomass resources and relatively efficient utilisation of existing capacity, yet constrained by slow project buildup and underachievement of targets.
Green hydrogen uptake
Odisha is rapidly positioning itself as a frontrunner in India’s green hydrogen landscape. The state is making steady progress in this sector and the following initiatives are strong evidence of this momentum:
In January 2025, Sembcorp Green Hydrogen India Private Limited and the Industrial Promotion and Investment Corporation Limited signed an agreement for the development of a green hydrogen facility in Odisha. The proposed green hydrogen facility is projected to produce up to 720,000 metric tonnes per year of green hydrogen and its derivatives.
In October 2025, the MNRE announced the recognition of three major ports as green hydrogen hubs under the National Green Hydrogen Mission. These coastal gateways will serve as integrated centres for production, consumption and future export. Odisha’s Paradip Port Authority is one of them, serving as a major hydrogen hub.
In December 2025, the Avaada Group signed an MoU with GRIDCO and IIT-Bhubaneswar to develop a Centre of Excellence in Odisha. The centre will lead advanced research on green hydrogen applications, covering energy storage, industrial use and mobility.
Recently, the Solar Energy Corporation of India Limited (SECI) conducted 13 green ammonia auctions under the Strategic Interventions for Green Hydrogen Transition Programme (Mode 2A, Tranche I), with a cumulative procurement capacity of 724,000 tonnes per annum (tpa). Two of these auctions focused on Odisha. ACME Cleantech Solutions Private Limited emerged as the winner of SECI’s first green ammonia auction to supply 100,000 tpa of green ammonia to Indian Farmers Fertiliser Cooperative Limited at a tariff of Rs 49.75 per kg. Additionally, ACME also won SECI’s 10th green ammonia auction to supply 75,000 tpa of green ammonia to Pradeep Phosphates Limited at a tariff of Rs 55.75 per kg.
Together, these developments signal that Odisha is not just participating in the green hydrogen transition but is actively shaping it.
Challenges
Odisha’s renewable energy transition has been a mix of hits and misses, with hydropower and emerging green hydrogen developments standing out as key successes, even as progress in other renewable segments remains uneven. Several structural, technical and institutional challenges continue to slow the pace of renewable energy deployment. Addressing these issues will be critical if Odisha is to move ahead from its potential to actual performance.
A major challenge is that Odisha has historically been a mining and heavy industrial state and thus, continuously relied on thermal power. The state’s abundant coal reserves and established thermal infrastructure have ensured energy surplus status and supported power-intensive industries such as steel, aluminium, cement and fertilisers. However, this thermal-heavy energy mix makes renewable integration a cumbersome task. As renewable energy capacity increases, surplus power conditions are further amplified. Managing this surplus while maintaining grid stability places additional pressure on electricity authorities.
Another pressing challenge lies in the distribution segment. Odisha’s discoms recorded average aggregate technical and commercial (AT&C) losses of 18.6 per cent in 2023-24. Such losses weaken the credibility of discoms and deter private investment in renewable energy projects. Furthermore, according to the National Smart Grid Mission, as of now, nearly 4,500 smart meters have been installed in Odisha, which is the lowest amongst all the eastern states. Without smart meters, billing errors, accurate demand assessment and lack of real-time monitoring persist which can undermine adoption and consumer trust for renewables.
Furthermore, despite possessing substantial renewable energy potential, installed capacity addition remains uneven and underwhelming across most technologies. The potential and installed capacity of renewable energy sources in Odisha are as follows: solar (139.47 GW, 761.32 MW), wind (12.13 GW, nil), large hydro (2,825 MW, 2,154.55 MW), small hydro (286.22 MW, 140.63 MW) and biopower (299 MW, 64.22 MW). Except for hydro, a substantial gap persists between Odisha’s renewable energy potential and its current installed capacity. The situation is particularly concerning in the wind segment as despite having over 12 GW of estimated wind power potential, the state has no installed capacity to date. Factors such as relatively low average wind speeds, thermal dominance and investor hesitation have stalled development.
At a regional level, Odisha grapples with broader eastern India challenges of low per capita electricity consumption, constrained grid infrastructure, persistent AT&C losses and limited private sector participation. These issues are further intensified by legacy coal dependence, regulatory uncertainty and infrastructure gaps typical of a developing industrial region. Together, they restrict capital inflows into the renewable energy space and slow innovation.
The way forward
Moving forward, for Odisha’s renewable energy transition to gain further momentum, distribution sector reform must be the starting point. Reducing AT&C losses through targeted feeder-level interventions, stricter enforcement against theft, and improved billing and collection mechanisms will be critical. Accelerating smart meter deployment can play a transformative role by improving transparency, enabling time-of-day pricing and strengthening demand-side management.
Furthermore, given Odisha’s power-surplus status, the focus must shift from capacity addition alone to system optimisation. This includes better scheduling and despatch mechanisms that can accommodate renewable generation without undermining grid stability. Strategic planning for balancing resources will be essential to ensure that renewable energy additions do not simply add to surplus but are effectively absorbed and utilised.
On the generation side, renewable power deployment must be scaled up rapidly to bridge the wide gap between the state’s assessed potential and the relatively modest installed capacity. At the same time, wind power development needs a decisive push forward. The state has already identified 12 sites for deployment of nearly 1,400 MW of wind capacity, signalling clear intent. However, progress on the ground still remains limited. Going forward, robust monitoring mechanisms are needed to ensure these projects move beyond planning and translate into actual capacity addition.
Crucially, Odisha must work towards unlocking private sector participation. Reducing regulatory risk, improving grid readiness and strengthening discom finances will collectively make the renewable energy ecosystem more investible. Given the state’s industrial base and port infrastructure, renewables can be positioned not just as a power source but as a pillar of a broader clean energy value chain.
