With its new energy policy, Odisha is hoping for a frictionless transition to renewable power

Odisha, which has typically not been considered a state with high renewable energy potential, is aiming to incentivise and focus on clean energy development within the state, as reflected in its latest renewable energy policy. Recognising that national renewable energy policies have favoured certain states rich in renewable resources, Odisha aims to address this gap and harness its renewable energy potential through state-level interventions while drawing in investors into the sector. The state government is offering exemption on duty and surcharges, along with other benefits and is targetting renewable energy capacity of 10,000 megawatt, or 10 gigawatt, by 2030, according to its renewable energy policy, 2022. The policy also focuses on new sources of renewables such as green hydrogen and green ammonia along with floating solar, wind energy and more.

Commenting on the central government’s waiver of charges on transmission of renewable energy across states, the new Odisha policy, released on December 1, states that this national waiver of Interstate Transmission System charges has created market distortion and discouraged the development of renewable energy projects in Odisha. The state policy document bats for a new renewable energy policy that will facilitate the development of commercially viable projects across multiple renewable energy technologies within the state. “Odisha is among the leading industrialised states. There is a clear demand for renewable energy from the distribution companies and the industries due to Renewable Purchase Obligation and Net Zero commitments,” it notes.

Chandra Bhushan, Chief Executive Officer of New Delhi-based think tank iForest, says that according to data on installed capacity in states, most of the coal-bearing states of eastern India, like Odisha, have not seen growth in renewable energy capacity. This is because of less attention to these states, from the central government. He says that a bias in the national renewable energy policies have helped renewable energy-rich states more than states like Odisha, where renewable energy potential is considered to be comparatively lower.

“Trends show that the national policies have helped the renewable energy-rich states like Gujarat, Rajasthan, and some southern states through incentives in inter-state transmission charges and open access. The focus should have been on states where renewable energy growth has been low. It is a misconception that renewable energy has a low potential in states like Odisha. The methodology adopted by Ministry of New and Renewable Energy in analysing the potential is flawed. There is a need for proper assessment of renewable energy potential,” he claimed.

Opportunities

Earlier this month, during the third edition of the Make in Odisha conclave in Bhubaneswar, several investors from different sectors converged to explore business opportunities in this coastal state. Odisha, which is typically known for large coal and bauxite reserves and hosting aluminium and steel industries around its mining belts, unveiled its Renewable Energy Policy at the event.

Along with a single-window mechanism for all renewable energy projects and easy access to land, the state policy offers several financial benefits for those opting for clean energy.

The new policy proposes that the nodal agency will provide a single window facility for approval of all renewable energy projects in the state and will facilitate approval and allotment of all projects in a time-bound manner. The agency will constitute a Project Screening Committee. All the departments, district collectors and state government entities will have to abide by the approvals and decisions taken by the Project Screening Committee in a timely manner, says the policy document.

The policy tackles the concern of land requirement for new renewable energy projects, saying that the renewable energy projects in Odisha will get government land earmarked for industry under the “Land Bank” scheme and other government lands, wherever available, on priority. In case the land needs to be purchased from a private landowner, the collectors will facilitate the purchase/lease of private land, says the policy document, adding that developers need to compensate the landowner adequately. The state also plans to convert the land acquired for renewable projects into non-agricultural status so that the developers do not need to pay any charge as per the local Land Reforms Act.

Talking about this provision, Shankar Prasad Pani, who is a lawyer with the National Green Tribunal and deals with land and environment related issues from Odisha, says that these land banks, which are usually government land, are often mired in controversies, especially in tribal areas, leading to conflict. This conflict can also happen in case of renewable projects if they are not implemented judiciously.

On the financial front, the policy document talks about several incentives such as Rs 50 paise per unit electricity duty exemption for renewable energy consumers either for captive use or under open access. The policy also proposes a 50% exemption of cross subsidy surcharge for open access consumers who want to use clean energy. It also talks about giving a 25% exemption in wheeling charges for captive/open-access consumers. The government has also decided to exempt stamp duty on the purchase and lease of land for renewable energy projects.

The government also proposed exemption of clearance from the State Pollution Control Board for any renewable energy project unless it falls under the category of hydro energy, biomass, and waste-to-energy projects.

New sectors

Odisha last released its renewable policy in 2016, in which it had offered benefits in electricity duty, stamp duty, and others. The latest policy has now added special provisions for supporting the green hydrogen and green ammonia sectors. It also plans to develop special green hydrogen/green ammonia hubs to meet the demands of petrochemical, fertiliser, steel sectors in the state as well as facilitate their export.

“The state is enriched with four operating ports, including one major port of Paradip, which can help us in easy export of green hydrogen and green ammonia to other countries in the world. For the growth of this sector, which first need to have an initial demand, and in states like Odisha, we have petrochemical industries and steel and fertiliser plants where these products could be used. Those who want to invest in this have the benefit of several incentives under our Industrial Policy Resolution 2022 and also under the Renewable Energy Policy. Such encouraging factors can help us in converting Odisha into a hub of green hydrogen and green ammonia, which are quite new technologies even for the whole world,” Biswadeep Parida, Director, PricewaterhouseCoopers Private Limited, told Mongabay-India. Parida worked with the Odisha government in the latest renewable energy policy formulation.

The policy also pushes for floating solar panels, which are installed on water bodies to produce solar energy. Similar floating solar panels are installed in other states of India such as Telangana and Assam among others, where scarcity of land is a challenge in the expansion of solar energy.

Odisha’s policy claims that as per the pre-feasibility report, the state has the potential to produce 5,000 megawatt of solar energy through floating solar. The government now plans to lease out water bodies under its control to private players or central or state public sector units to be utlised for floating solar. The government also plans to connect its state electricity utility, Grid Corporation of Odisha, to buy the electricity produced through floating solar developers at a mutually agreed price.

During the Make in Odisha conclave, the state also announced that it had signed three memorandum of understanding with three companies that are planning to invest a total of Rs 51,000 crore (Rs 510 billion) in different green energy projects in the state. This also includes the investment of NTPC Green Energy in floating solar and other renewable projects in the state. Satluj Jal Vidyut Nigam Limited, an Indian public sector undertaking involved in hydroelectric power generation and transmission has also planned floating and land-mounted solar projects of a total of 2000 megawatt.

While experts welcome the move and the proposed investments, they cite the ground challenges that are barriers to the growth of renewable energy, especially floating solar, in the state. Chandrashekhar Mishra, the Chairman of the Solar Energy Society of India-Odisha Chapter, says, “There is a dearth of open land for solar projects as around 30% of the land here is forest land, a fact also admitted by the government. Because we have around 30-40 water reservoirs, especially in southern Odisha, we are planning to go ahead with floating solar. However, for such projects, due to more maintenance cost of floating solar than land-mounted ones, there could be an issue with Grid Corporation of Odisha later if it buys the power at a higher rate from such floating solar projects.” Grid Corporation of Odisha is a state-government enterprise that carries out the business of bulk transmission of electricity.

Energy transition policy

Odisha hosts the highest coal reserve of power-grade coal in India, in its Talcher coalfields, and a number of its districts like Angul, Sundergarh and Sambalpur are involved in coal mining. A large number of people are directly or indirectly engaged in coal-related works for their livelihood.

For the first time, the state’s renewable energy policy also introduced the concept of “Energy Transition” and talked about training energy-related workers in renewable energy technologies to ensure a smooth transition as coal mines in the state, where many of them work, are likely to see a phased-wise closure given the Indian government’s net zero ambition.

Chandra Bhushan from iForest, the organisation which recently conducted a detailed study on the issue of Just Transition in Angul district of Odisha, told Mongabay-India that the policy is futuristic and not theoretical. He also appreciated the inclusion of energy transition into the policy to pave the way to prepare the next generation for the rising demand for renewables in the country.

Ashok Choudhury, a retired official from the Odisha Renewable Energy Development Agency who is now an independent energy consultant, told Mongabay-India that the current policies show the seriousness of the government to bring renewable energy into the mainstream of dialogue, and this is likely to pave the way for a better green energy ecosystem in the state.

“The new policy shows the activeness of the government with the concept of solar parks and a lot of incentives for investments. Even the new industrial policy also is offering many new incentives. It appears that the government is trying to make renewable energy and to make it mainstream,” he said.

This article first appeared on Mongabay.