Power Sector Transition in Odisha

This article is part of the Global Energy Transition Tracker project sponsored by Global Energy Monitor

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Introduction

India has an unconstrained renewable energy potential of 24,000 GW, though population and technical challenges seriously hinder deployment. Odisha is one hotspot that researchers believe have significant potential for rapid deployment of wind and solar.

Odisha, formerly known as Orissa, is the second largest coal producer state (2021) with the largest coal mining reserves in India. Based on GEM data, the state produces approximately 90% of its electricity from coal. India is reliant on Odisha's coal reserves, and in recent years, coal mining and coal-fired power plants have increased. That said, Odisha is encouraging renewable energy development and aims to produce 43% of the electricity from renewable energy sources by 2030.

Odisha is highly vulnerable to climate change, being prone to disasters such as droughts, floods, and cyclones. The vulnerabilities are further evident in the socioeconomic context, environmental pollution and health risks. While Odisha is a major source of India's coal, 15.68% of residents fall below the poverty line. There are efforts to better connect Odisha to the rest of the country to foster greater employment, trade, and mobility.

The Governments of Odisha and India do not have provisions for the coal phaseout as of June 2023. Yet, the state has abundant potential for facilitating a just power transition in the state, serving as a tipping point for the national decarbonization in India.

Current System Description

Current Power Capacity Mix

Coal Mining: According to Global Energy Monitor's October 2022 report Why India's New Coal Mines Won't Solve its Power Crisis, Odisha holds the second largest operating capacity of coal mines in India, with the largest number of proposed capacity expansion across India. These proposed are clustered in Angul and Sundargarh districts of Odisha. Angul is an industrial hub for coal power production in India while Sundargarh is an area rich in natural resources that facilitate the district as a coal mining hub in India.

Figure 1: Coal capacity in construction and pre-construction in India by state, 2022. Data and graphic from Global Energy Monitor's Boom and Bust Report, April 2023. Report produced in collaboration with CREA, E3G, Reclaim Finance, Sierra Club, SFOC, Kiko Network, CAN Europe, Bangladesh Groups, ACJCE, Chile Sustentable.

Coal-fired Power: According to Global Energy Monitor's Global Coal Plant Tracker, Odisha has 18,335 MW of coal power in operation as of December 2023. 42% of the installed capacity is attributed to captive plants, used for industrial purposes. Odisha is also among the leaders of permitted and pre-construction of new coal power projects in India, as demonstrated in Figure 1.

Hydropower: Global Energy Monitor demonstrates that Odisha has five hydro power projects with capacity over 200 MW with a total operating capacity of 1,968 MW as of May 2023. Odisha also operates small hydro power projects that include projects under 50 MW. As of March 2023, India's Ministry of New & Renewable Energy reported to include just under 116 MW of small hydro power in Odisha.

Solar: In March 2023, Odisha reported a total of 453 MW of solar, including 404 MW of ground-mounted solar, according to the Ministry of New & Renewable Energy. 395 MW of this solar power was added before March 2019. In August 2023, Ministry of New and Renewable Energy in India published the installed capacity of solar power in each province. The solar installed capacity in Odisha was 458.88MW

Energy Source	Installed Capacity	Number of Plants
Coal	18,334.5 MW	28 (96 units)
Hydropower	1,968 MW	132
Solar	458.88 MW

Prospective Power Capacity

A 2018 report by India's Ministry of New and Renewable Energy (MNRE) estimated the Odisha has the potential produce up to 25.78 GW of solar power. However, In a study administered by New Delhi-based environmental group, International Forum for Environment, Sustainability and Technology (iFOREST), Odisha was assessed to have a potential of 170 GW, much larger an estimate than that reported by MNRE in 2018. iFOREST conducted this study by cross-referencing available land with existing transmission infrastructure to conclude that Odisha has the potential to produce 25,000 MW of solar energy. It is important to note that these two reports hold different metrics for land usage, with iFOREST identifying 18 sub-categories of land types, where five of them - open scrub land, mining wasteland, industrial wasteland, dense scrub land as potential sites for solar panel installation. The use of this land would provide 170 GW of renewable energy on only two percent of wasteland in Odisha.

By July 2023, the total prospective capacity from coal is 10,890 MW (2,400 MW announced, 2,470 MW pre-permit, 3,300 MW permitted, 2,720 MW under construction)

Energy Source	Announced	Pre-construction	Construction	Total
Coal	2,400 MW	5,770 MW	2,720 MW	10,890 MW
Hydropower	1,190 MW			1,190 MW
Solar	300 MW	200 MW		500 MW

Renewable Energy in Odisha

Renewable Targets

National Target: In 2010, the Jawaharlal Nehru National Solar Mission (JNNSM) - an initiative intended to build and bolster India’s solar industry - established a target of 20 GW of grid-connected solar by 2022, a goal which was reached in 2018. This target was raised in 2015 to 100 GW of solar by 2022, which would include 40 GW of rooftop solar. While this goal was not met, utility-scale solar reached 70.1 GW by June 2023. Rooftop solar installations fell far short of the target and only reached 8.8 GW by the end of 2022. In 2022, India raised its renewable energy targets to 500 GW by 2030, of which 280 GW will come from solar generation.

Nationally Determined Contributions (NDC): 50% of India's power needs to be coming from non-fossil sources by 2030.

Prime Minister Narendra Modi set the goal for a net zero economy in India by 2070.

Renewable Energy Target (RES): Prime Minister Narendra Modi has announced more ambitious targets for 2030, including installing 500 GW of renewable energy capacity, reducing the emissions intensity of its economy by 45%, and reducing a billion tonnes of CO2.

In 2023, the New & Renewable Energy Secretary Bhupinder Singh Bhalla mentioned that India is expected to add 25GW of renewable energy in 2023, and the government is planning to raise the annual increase to 40GW in 2024, aiming for 50GW for the next five year. Among the newly added capacity, at least 10GW will come from wind energy.

Progress toward national clean energy targets: Analyses conducted in early 2024 predict that India is on-track to meet its 2030 clean energy goals. An estimated 412 GW of wind, solar, and hydroelectric power will be online by 2030, while fossil fuels are expected to drop from 57% to 36-41% of the country's energy share by the end of the decade. Financing remains the largest challenge to these goals.

Odisha Target

Renewable Purchase Obligations (RPO) are target percentages of renewable electricity to be produced or purchased by the electricity distribution licensees.

RPOs are recommended by the Ministry of Power in consultation with the Ministry of New and Renewable Energy (MNRE). The Odisha Electricity Regulatory Commission (OERC) mandates a trajectory for Renewable Purchase Obligation (RPO) and Energy Storage Obligations (ESO) till 2029- 30, based on Ministry of Power Order dated 22.07.2022 titled “Renewable Purchase Obligation and Energy Storage Obligation Trajectory till 2029-30”.

The Distribution Licensees in Odisha can meet their RPO targets by procuring power through the Green Day Ahead Market (G-DAM) and Green Term Ahead Market (G-TAM) on IEX platform.

Table 1: The RPO trajectory published by the Odisha Electricity Regulatory Commission (OERC), 2021

Year	Solar RPO	Hydro RPO	Other RPO	Total RPO
2021-22	7.25%	0.18%	5.82%	13.25%
2022-23	8.00%	0.35%	6.15%	14.50%
2023-24	8.75%	0.66%	6.59%	16.00%
2024-25	9.75%	1.08%	7.17%	18.00%

Odisha has been purchasing electricity produced from renewable energy sources from neighboring states to meet its RPOs. GRIDCO, the Nodal Agency responsible for approval, allotment, and assistance to renewable energy projects in the state, has contracted renewable energy capacity of 2,420 MW including 1,941 MW from solar sources till 31.10.2022 out of which only 460 MW is within the state.

Table 2: The RPO trajectory recommended by the Ministry of Power, 2022

Year	Wind RPO	Hydro RPO	Other RPO	Total RPO
2022-23	0.81%	0.35%	23.44%	24.61%
2023-24	1.60%	0.66%	24.81%	27.08%
2024-25	2.46%	1.08%	26.37%	29.91%
2025-26	3.36%	1.48%	28.17%	33.01%
2026-27	4.29%	1.80%	29.86%	35.95%
2027-28	5.23%	2.15%	31.43%	38.81%
2028-29	6.16%	2.51%	32.69%	41.36%
2029-30	6.94%	2.82%	33.57%	43.33%

Wind Power Projects commissioned after March 31, 2022, Large Hydropower Projects commissioned after March 8, 2019, and any Hydropower Projects starting 2022-2023 are counted as part of RPOs. Power generated from co-firing biomass in coal based thermal power plants are considered renewable energy to contribute to RPO as well.

Odisha Renewable Energy Policy, 2022

Based on the revised RPO goals, published by the Ministry of Power in 2022, Odisha Renewable Energy Policy estimated the cumulative capacity to be commissioned before 2030 to meet the RPOs as seen in the table below.

Table 3: Capacity addition required till 2030 to meet RPOs

Additional Requirement	Cumulative Capacity (MW)
	DISCOMS	Captive/OA	TOTAL
Wind	900	2,600	3,500
Hydro	300	900	1,200
Other	4,500	12,500	17,000
Total Renewables	5,700	16,000	21,700

DISCOMs are Distribution Licensees of Odisha, the power supply and distribution companies. All four DISCOMs in Odisha are currently owned and operated by Tata Power through the PPP model. Captive/OA stands for industrial electricity needs.

The policy of waiver of ISTS charges distorted the market and disincentivized development of renewable energy in Odisha. The Government of India will phase out the policy gradually starting in 2025. There are other economic incentives in place as well.

Major Renewable Projects

According to GEM, as of June 2023, there are following renewable energy projects with a capacity greater than 50 MW planned in Odisha.

Table 4: In-development renewable energy projects in Odisha

Project	Capacity	Status
Neepco Odisha solar farm	200 MW	pre-construction
Rengali floating solar farm	300 MWac	announced
Deogaon hydroelectric plant	100 MW	announced
Kapasira hydroelectric plant	100 MW	announced
Khadago hydroelectric plant	100 MW	announced
Godhaneswar hydroelectric plant	120 MW	announced
Salki hydroelectric plant	125 MW	announced
Balijori hydroelectric plant	160 MW	announced
Barmul hydroelectric plant	200 MW	announced
Middle Kolab hydroelectric plant	285 MW	announced

Notably, according to the Odisha Renewable Energy Policy, 2022, Hybrid-RE projects such as a combination of solar/floating solar & PSH, solar/floating solar & battery storage are prioritized. These projects shall receive priority in the allocation of land, water bodies and development of STU connectivity. Moreover, the Government of Odisha is eyeing green hydrogen production, so much so that they have entered into an agreement with REC Limited to finance a green ammonia project in Gopalpur.

Potential impacts from renewable expansion

The Odisha Renewable Energy Policy of 2022, while ambitious in its aims, may cause social and environmental problems for community members. Despite provisions for workforce development for former coal employees, many renewable energy roles are specialized which will complicate transitions from coal to wind or solar. Insufficient compensation through the Land Bank system could create social unrest, which has been seen elsewhere globally (see Power Sector Transition in La Guajira). Floating solar is also difficult to maintain and at risk of water-based weather events, which could create an unstable power supply.

Other potential effects of floating solar include the following:

• Approximately 2% reduction in evaporation resulting in more water availability for irrigation and hydropower generation.
• Land not used for erecting ground mounted solar projects may be utilized for other purposes.
• Blocking sunlight affects underwater plants and algae.
• Risk of rainwater pollution with cadmium telluride, a heavy metal present in solar photovoltaics

In addition, the energy transition will require critical minerals like graphite, and Odisha is one province where the national government is beginning to prospect. However, forest ecosystems have already been damaged in the prospecting process, and the National Commission for Scheduled Tribes has been involved to fight violations against the Forest Rights Act, as well as illegal threats to Tribal communities.

Fossil Fuel in Odisha

Fossil Fuel Resources and Retirement

India is the second largest coal producer and consumer in the world, with government plans to expand production, and projections indicate that India is expected to beat China as the world’s largest importer in the next few years.

Odisha Climate Change Action Plan (2018-2023), Odisha Climate Change Action Plan (2021-2030), and Odisha Renewable Energy Policy (2022) do not include any plans for the coal phase-out but mention sustainable mining practices and education for skill enhancement to prepare the workforce for renewable energy jobs. Besides just coal, Odisha is eyeing the petrochemical sector as a potential area of investment, citing the immense potential in the industry and massive economic opportunity it could provide to the state.

According to the Global Coal Plant Tracker data, there are 28 operating coal plants (96 units, 18,834.5 MW) in Odisha. Approximately 20 of them are captive and used for industrial needs (7,474.5 MW). There are nine in-development (announced, pre-permitted, permitted, and under construction) coal plants totaling 10,890 MW and one shelved project (2,400 MW). This does not include three additional coal thermal power plants announced in February 2024: the NTPC Darlipali Super Thermal Power Station (2x800 MW), the NSPCL Rourkela PP-II Expansion Project (1x250 MW), and the NTPC Talcher Thermal Power Project Stage III (2x660 MW).

Global Coal Mine Tracker indicates the presence of 24 coal mines operating in Odisha. In addition to the active mines, there are 14 proposed mines, two that are mothballed, and five that have been shelved.

Operating Coal Mines in Odisha:

Coal Mine Name	Mine Size (km²)	Mining method	Annual Coal Output (Mt)	Employment
Ananta Coal Mine	14.2	Open Pit	17.1	417
Balaram Coal Mine	13.8	No data	7.74	1,326
Basundhara (West) Coal Mine	3.57	Open Pit	0.95	374
Belpahar Coal Mine	14.4	Open pit	7.51	1,024
Bharatpur Coal Mine	9.27	Open Pit	9.25	1,150
Bhubaneswari Coal Mine	6.4	Open Pit	30	1,007
Dulanga Coal Mine	6.54	Open Pit	5.29	931
Garjanbahal Coal Mine	6.5	Open Pit	17.29	1,421
Gopalji Kaniha Coal Mine	7.18	No data	12.15	1,392
Hingula-II Coal Mine	17.41	No data	12.38	1,398
Hirakhand Bundia Incline Mine	No data	No data	0.19	785
Jagannath Coal Mine	5.5	Open Pit	7.5	1,096
Jamkhani Coal Mine	10	Open Pit	0.3	408
Kulda Coal Mine	6	Open Pit	21	816
Lajkura Coal Mine	7.3	Open Pit	4.5	589
Lakhanpur Coal Mine	24.52	Open Pit	22.5	1,187
Lingaraj Coal Mine	14.1	Open Pit	16.51	1,793
Manoharpur Coal Mine	9.77	Open Pit	5.24	705
Nandira Coal Mine	3.7	Bord and Pillar	0.06	611
Orient Mine 1 & 2	No data	No data	0.19	672
Samleswari Coal Mine	13.35	Open Pit	6.44	1,059
Talabira II & III Coal Mines	19.14	No data	10.03	1,517
Talcher UG Coal Mine	No data	Bord and Pillar	0.36	958
Utkal E Coal Mine	5.24	No data	No data	475

Proposed Coal Mines in Odisha:

Coal Mine Name	Mine Size(Km2)	Mining Method
Baitarni West Coal Mine	No data	Open Pit
Burapahar Coal Mine	No data	Open Pit
Ghogharpalli & Its Dip Extension Block Summary	No data	No data
Integrated Belpahar, Lakhanpur, Lilari Coal Mine	44	Open Pit
Kuraloi A North Coal Mine	9.63	Open Pit
Lakhanpur Coal Mine	No data	Open Pit
Manoharpur Coal Mine	8.7	Open Pit
Meenakshi West Coal Mine	No data	No data
Naini Coal Mine	9.12	No data
Radhikapur (East) Coal Mine	10.16	Open Pit
Radhikapur (West) Coal Mine	10.29	Open Pit
Rampia & Dipside of Rampia	No data	Mixed
Sakhigopal B Kankili Coal Mine	No data	Open Pit
Utkal D Coal Mine	3.01	No data

Coal production in the district of Angul, the largest coal producer in Odisha, is set to peak at 308 MMTPA in 2033, decreasing around 2040 until zero in 2070, in line with India's Net Zero by 2070 goal. Installed capacity at the coal-fired power plants is set to peak in 2027, gradually decreasing until zero in 2070. These numbers are estimated by iForest based on current policies and regulations. Angul will see new coal mining activity with the commercial operation of the Machhakata (Revised) coal block, which has reserves of 1.4 billion tonnes and a capacity of 30 MTPA.

Under the Net Zero by 2050 goal, 75% of new coal mines risk becoming stranded assets.

There are no provisions in laws and regulations on land repurposing of coal mines for renewable energy. However, Siddharth Swain, Angul District Collector shared plans on repurposing the abandoned coal mine land of 80 acres to a solar park.

Overview of current fossil fuel impacts

Impact on tribal communities
Mining and other industrial activities, most notably coal mining has been disproportionately affecting the tribal communities, causing displacement, and altering livelihoods rooted in the forest resources. Odisha is home to India's third largest tribal population, and includes 13 communities designated as Particularly Vulnerable Tribal Groups (PVTGs) by the Ministry of Tribal Affairs of India. Coal and mineral mining have been at the center of the conflict with local communities in Odisha. Exact statistics of the number of people removed and relocated for mining are not reportedly maintained by the Ministry of Tribal Affairs, and therefore it is difficult to understand the exact extent to which tribal communities are directly impacted by the mining activity in Odisha. However, the Government of Odisha has reported that "529 tribal families from Jharsuguda district, 179 families from Angul district and 356 families from Sundergarch district have been displaced due to mining in the last 10 years" as of April 2022. This information has been met with notable skepticism due to the expanse of land that the government has auctioned for mining activity, as 32,000 hectares were acquired for mining in 2020 alone.

Environmental effects
The Angul-Talcher industrial sector is categorized as critically polluted by the Central Pollution Control Board (CPCB).Air and water quality are classified as "critical". A major factor is the poor regulatory compliance of the industries with pollution control measures. For instance, air pollution control systems at power plants or industrial facilities are often unused or the operation causes concern. Notably, abandoned mines, if not properly reclaimed, may continue polluting the environment.

The environmental effects of industrial activities in Odisha include but are not limited to the following:

• Landscape change
  • Loss of productive land (agriculture, farming, etc.)
  • Loss of habitat for wildlife
  • Removal of vegetation & topsoil
• Water quality & quantity
  • Pollution of surface and groundwater
  • Water stress (e.g., loss of perennial streams, overexploitation of groundwater)
• Air quality
  • Exposure to pollutants in mining (e.g., coal dust, fugitive gases, uranium)
  • Exposure to emissions from coal-fired power plants, steel plants, etc.
• Noise pollution
• Climate change
  • Coal mine methane emissions
  • Greenhouse gas emissions, mostly from coal-fired power plants

Health effects
Premature deaths per year due to air pollution in India reached 1.2 million, and are expected to rise to 1.4 million in 2040 if India policies and development continue to progress as they are now. If the country shifted to meet the a more sustainable goals, this would decrease to an estimated 0.6 million.

According to estimates from the Air Quality Life Index, the life expectancy of the average person in India would increase by 5.26 years if fine particulate matter pollution met World Health Organization guidelines. In Odisha, the average citizen's life expectancy would increase by 4.19 years.

Mining and manufacturing activities in Odisha have a slew of negative health effects. The effects vary based on the types and sources of pollution.

Maureen et al. (2021) estimated the mortality impacts of coal-fired power plants in 2018 in India.

• Operating plants in Odisha contributed approximately 11.5% of population-weighted ambient PM2.5 in the state.
• 12.8 GW operating installed coal-fired capacity is estimated to emit 58.4 kilotons of PM2.5 in 2018 in Odisha.
• Ambient PM2.5 attributable to coal-fired power plants is estimated to have caused 24,090-42,463 deaths in the state.
• Assuming no exposure to household air pollution, canceling the 14.2GW of planned coal-fired capacity is estimated to prevent 36,320 deaths avoided over 40 year plant lifetime. Notably, since 2018, 6 GW of coal-fired capacity came online, with 8.8 GW in development.

There are similar negative health effects, mostly respiratory illnesses, associated with air pollution caused by coal mining and other industrial activities in Odisha at each level: mining, transportation, and manufacturing.

Water and soil pollution may lead to adverse health effects as well.

The health effects of industrial projects may also be underestimated by Environmental Impact Assessments. JSW Utkal Steel Integrated Steel Plant includes a 900 MW captive coal-fired power plant, a 10 MTPA cement plant and captive jetties with a capacity of 52 MTPA.

• The air quality in the area does not meet the National Ambient Air Quality Standards (NAAQS) for PM10 and PM2.5.
• The Environmental Impact Assessment was found to be lacking.
• Centre for Research on Energy and Clean Air (CREA) estimated projected emissions and respective health impacts. They found that the air pollution caused by the Integrated Steel Plant would cause 94 deaths a year, 180 emergency room visits due to asthma, 160 preterm births and 75,000 days of work absence per year.

Multiplier & chain effects
Direct effects such as landscape change and pollution may lead to indirect and complex multiplier and/or chain effects.

• Deforestation may multiply the effects of climate change, increasing the disaster risk and effects of floods, cyclones and droughts
• Water overexploitation and pollution may disturb the water cycle, leading to a decrease in rainfall
• Pollution may negatively affect agriculture and dependent livelihoods
• Mining may disrupt social structures and cultures

Employment

Current employment by sector

According to GEM's Coal Mine Tracker, approximately 23,111 people are employed at the 24 operating coal mines in Odisha. Among proposed coal mines, employment data is only available for the Lakhanpur Coal Mine, which will have a workforce of approximately 1,187 employees. There are five shelved coal mines with an estimated labor force of 1,187.

According to iForest, coal mining in Angul, Odisha's largest coal-producing district, employs 53,802 people, formally (38%) and informally (62%). Approximately 168,000 people, 29% of all workforce in Angul are directly employed in coal mining (53,802), coal-based industries (59,251), and coal transport (54,947) sectors. 69% of the employment is informal. Informal employment presumes a lack of employment and social security benefits.

State-wide, officially, coal mining seems to be a minor part of the mining industry in Odisha. The industrial sector, composed of manufacturing, construction, and mining, officially employed 28.47% of the workforce in 2020-2021. Notably, the industrial sector is powered by coal.

Employment in coal mining and coal-dependent industries is expected to double in the next 10 years, with coal production increasing three times.

Prospective employment from renewable energy sector

The Odisha Climate Change Action Plan (2018-2023), Odisha Climate Change Action Plan (2021-2030), and Odisha Renewable Energy Policy (2022) do not include estimations on prospective employment from the renewable energy sector. However, employment in coal mining and industries is expected to increase in the next decade. There are policies to make manufacturing "greener and cleaner", focusing on low emissions strategies. Yet, Angul-based Swapna Sarangi, General Program Manager of the Foundation for Ecological Security claimed that the green energy jobs are unlikely to accommodate the number of people dependent on coal and coal-based industries.

Three MoUs for development of approximately 4 GW of solar and 3 GW of wind in Odisha are expected to generate 1,200 direct and 2,600 indirect employment opportunities.

Supply Chain

Odisha is home to India's first facility manufacturing Silicon Carbide semiconductors, an important component for the conversion, storage, and management of renewable energy. The plant will create more than 500 jobs. Moreover, the Government of Odisha approved three proposals from the Electronics System Design and Manufacturing sector, which will bolster Odisha's local renewable energy component manufacturing capacity.

Land availability

Land available for renewable energy development in Odisha is administered through the Odisha Industrial Infrastructure Development Corporation (IDOC) "Land Bank" scheme, according to the Industrial Policy Resolution (IPR) (2022) & Odisha Renewable Energy Policy (2022):

• Projects with an operational life of 25-30 years will be leased from the Government.
• The Nodal Agency, GRIDCO, is to coordinate with District Collectors/IDCO to identify suitable land. If the land is privately owned, the developers must purchase of lease it.
• The Nodal Agency may issue an "Expression of Interest (EoI)" to aggregate private land for renewable energy projects.
• The land used for grid-connected renewable energy is labeled as Non-Agricultural use. Such land is exempt from charges as per the Land Reforms Act (1960) of Odisha.
• The land used for renewable energy is exempt from the ceiling on land holdings as per the Land Reforms Act (1960) of Odisha.

Notably, the objective of the Industrial Policy Resolution (IPR) (2022) is to make Odisha the industrial hub of Eastern India. The goal is to make the industrial growth easier administratively and economically. Priority sectors do not include renewable energy, yet the thrust sectors include green hydrogen and green ammonia, and green energy equipment. The Land Bank scheme identified by IDOC in 30 districts across Odisha appears to be allotted based on the priority list given in the IPR.

Odisha prepared a pre-feasibility report (PFR) for more than 5,000 MW floating solar. The Nodal Agency is to coordinate with the Department of Water Resources to identify suitable sites for the development of floating solar projects, and set up an annual lease rent. Industries also can set up floating solar plants to meet their captive electricity needs.

Table 5 provides estimations of solar potential in the largest coal-producing district in Odisha, Angul.

Table 5: Estimated land and water-based solar potential in Angul, Odisha

Land use	Estimated area (ha)	Potential (MW)
Reclaimed mining land (External OB area)	1,868	934
Reclaimed mining land (Excavated area)	9,293	4,646
Wasteland	3,852	1,925
Floating solar	66,480	3,300
Total potential		10,805

According to the International Energy Agency’s 2023 report “Net Zero Roadmap: A Global Pathway to Keep the 1.5 °C Goal in Reach,” an average utility-scale solar PV project of 100 MW generally occupies from 1 km² to 3 km², while a 100 MW onshore wind turbine project generally covers from 5 km² to 30 km².

Based on these estimates, the current prospective 550 MW of utility-scale solar will require from 5.5 km² to 16.5 km².

Potential from retired fossil fuel sector

About 33,000 ha of land will be available from closure of coal mines and power plants, of which 93% is from coal mining over the next three to four decades. Currently, there are no laws or regulations provided for repurposing mining and industrial land for renewable energy. However, there are individual cases with plans on such repurposing.

Minerals Conservation and Development Rules, 1988, aimed to reclaim abandoned mines for productive use such as agriculture, farming, and forestry. However, there are no enforcement or monitoring mechanisms, causing waste land.

Mothballed and shelved coal mines in Odisha:

Coal Mine Name	Mine Size(km2)
Balaram Coal Mine	No data
Bhubaneswari Coal Mine	No data
Chhendipara Coal Mine	No data
Deulbera Coal Mine	No data
Kulda Coal Mine	9
Mandakini-B Coal Mine	20.73
Siarmal Coal Mine	22.9

Symbolic Importance

The power transition in Odisha, a major industrial hub in India with the largest coal mining capacity under development may become a major tipping point in the national decarbonization of India. Given how other stakeholders such as steel, aluminum, bauxite, ferroalloy industries and refineries are dependent on Odisha's coal, a strategic and just power transition in Odisha may ripple the positive effects nationwide.

Odisha's transition to cleaner energy sources, given its substantial industrial presence and coal-dependent sectors like steel, aluminum, and refineries, has the potential to be a pivotal point in India's decarbonization journey. In 2021, Odisha became India's second-largest coal producer and has the country's largest coal mining reserves. A striking 90% of its electricity production relies on coal.

As of June 2023, both the state and central governments lack concrete coal phaseout plans. Nevertheless, Odisha's significant potential for a just and strategic energy transition positions it as a possible catalyst for broader national decarbonization efforts, significantly influencing India's sustainability and carbon reduction goals.

Permitting

Renewable energy projects, like most major projects in India, requires environmental clearance. To receive clearance, a developer must complete an Environmental Impact Assessment (EIA) which outlines potential effects that the project may have on the surrounding environment, as well as mitigation measures that will be undertaken. Any project larger than 1 MW must undergo an EIA, with larger developments requiring more rigorous analysis and wind/solar requiring additional wildlife assessments. The clearance process is time-intensive, often delayed, and bureaucratically complicated. Similarly, land acquisition must be completed carefully with consideration of landowner compensation and agency approvals, both of which can delay development.

Environmental clearances require the following steps:

1. Site identification
2. Environmental Impact Assessment completion, which is reviewed by relevant state agencies like the State Pollution Control Board and State Forest Department
3. Public hearing, with a hearing committee comprised or the District Collector; officials from the district development body, State Pollution Control Board, Department of Environment and Forest, and Taluka and Gram Panchayat; senior citizens of the district, and others.
4. Application and approval (if applicable) of environmental clearance. Approval is administered by an Appraisal Committee.
5. Requisite documents needed to finalize compliance must be filed within 90 days of approval.

According to the Odisha Renewable Energy Policy of 2022, a Nodal Agency is responsible for approving renewable energy projects and providing support to project developers, primarily by providing letters of support and facilitating coordination with the appropriate agencies. The Nodal Agency aims to provide a "single window facility" for renewable energy projects, and captive renewable energy projects are eligible to expedited approvals. Responsibilities of the single window facility are:

• Approving projects less than 50 MW
• Referring projects with capacities from 50 MW - 200 MW to a committee led by the Chief Secretary to be approved
• Referring projects with capacities greater than 200 MW to the Cabinet Committee with recommendations for award
• Resolving policy level obstacles to deploying renewable energy technologies
• Monitoring project implementation progress

GRIDCO was selected as the Nodal Agency following the publication of the Policy.

Governmental information

Related government papers

• States in India publish State Action Plan on Climate Change (SAPCC) in accordance with the National Action Plan on Climate Change (NAPCC), which was initially prepared in 2008. The State Action Plans are divided into phases. They assess climate vulnerabilities by sector, lay out priorities and action points.
  • Odisha Climate Change Action Plan (2018-2023)
  • Odisha Climate Change Action Plan (2021-2030): Key energy priorities outlined in this phase are 1) promotion of grid-connected wind power, 2) maximizing solar generation potential, 3) improving energy efficiency, 4) increasing awareness about energy efficiency, and 5) strengthening energy conservation.

• The Odisha Renewable Energy Policy (2022) lays out a framework for renewable energy development in Odisha.
• The Green Energy Open Access Rules (2022) promotes generation, purchase and consumption of green energy intra- and inter-state.
• The Industrial Policy Resolution (IPR) is a framework for industrial development in Odisha, which includes provisions on land allotment relevant to renewable energy.
• The Electricity Act (2003) provides a legal framework regarding electricity generation, transmission, distribution, trading and the use of electricity. The policy includes provisions on National Energy Policy and tariff policy, as well as other tools that may enable renewable energy development.

Relevant political coalitions

Odisha is working with the World Bank on a climate-related development finance loan, with GIZ and DFID on implementation of a climate change-related activity, and with the Japan International Cooperation Agency on major programs in forestry, energy, and urban development. It is also seeking assistance for its water sector program from the Asian Development Bank.

Transmission

Figure 2: Transmission map of Odisha Power Transmission Corporation Limited, 2017

Odisha’s transmission system availability, or the measure of time a transmission line is not out of service for maintenance or replacement, has been 99.9% for the last 10 years. The state now operates an energy surplus with a peak supply of over 4GW. Currently, there are 176 grids with total capacity of 23,316 MVA and total length of 15,500.384 km in Odisha. Of those, five are 400kV, 40 are 220kV, and 131 are 132kV.

Transmission infrastructure has been made in Odisha’s budget to address low voltage issues for last mile consumers in select locations. In 2023, INR 50 crore was allocated in the state budget in 2023 for renewable energy transmission in Odisha. The budget aims to ensure the renewable energy generation can be supplied to different parts of Odisha.

Current transmission resources

As of January 31, 2022, Odisha's electricity transmission grid was the following:

Table 6: Network capacity in Odisha, 2022

Voltage Level	Grid substations (N)	Installed capacity (MVA)	Lines (ckt. km)
400kV	5	3,335	1,196.872
220kV	40	10,580	6,285.602
132kV	131	9,401	8,017.91
Total	176	23,316	15,500.384

Table 7: Projected network capacity in Odisha, 2023

Voltage Level	Grid substations (N)	Installed capacity (MVA)	Lines (ckt. km)
400kV	5	3,835	1,196.872
220kV	49	11,980	7,000.372
132kV	140	9,841	8,415.910
Total	194	25,656	16,613.154

Social and environmental impacts of new transmission

Presently, Odisha experiences frequent power cuts and load shedding due to improper load balancing, poor distribution infrastructure, and incidences of "nor'wester" winds and thunderstorms (or Kalbaisakhi). Resilient transmission upgrades will likely improve capacity constraints and strengthen assets.

Ownership

Major owners of current fossil capacity

According to GEM Global Coal Plant Tracker data, top owners of installed capacity in coal-fired power plants are given below. According to GEM Global Gas and Oil Plant Tracker, there are no gas and oil plants in Odisha.

Table 7: Owners with at least 1,000 MW of installed coal-fired capacity

Parent	Owner	Installed capacity	% of total operating capacity
NTPC	NTPC Ltd	4600	25.1
Volcan Investments	Vedanta Resources Plc, Sterlite Energy Ltd	3705	20.2
Jindal Group	Jindal Steel & Power Ltd, Jindal Stainless Ltd	1060	5.8
Punjab National Bank	Jindal India Thermal Power	1200	6.5
Hindalco Industries	Hindalco Industries Ltd	1357.5	7.4
Government of Odisha	Odisha Power Generation Corp	1740	9.5
National Aluminum (NALCO)	National Aluminum Co Ltd	1200	6.5
GMR Group	GMR Energy	1050	5.7
Total		15492.5	86.7%

Major owners of prospective renewables

As of June 2023, owners of major prospective renewable energy projects in Odisha are government-owned companies such as Green Energy Development Corporation of Odisha Limited (GEDCOL), North Eastern Electric Power Corporation Limited (NEEPCO), and National Hydro Electric Power Corporation Private Limited (NHPC), SJVN, NLC, and NTPC Green Energy.

GRIDCO signed three MoUs for an investment of ₹51,000 crore in Odisha in 2022. The first MoU was with NTPC Green Energy for the development of solar power, including floated solar, and pumped storage hydropower projects. The first phase includes 1000 MW pumped storage hydropower and 2000 MW solar projects. The second MoU was signed with Satluj Jal Vidyut Nigam (SJVN) Limited for the development of 2000 MW of pumped storage hydro and 2000 MW of solar, including floating solar, with a cumulative investment of ₹30,000 crore. The third MoU was signed with Neyveli Lignite Corporation (NLC) for 600 MW solar and 5 million ton green hydrogen production for ₹4,000 crore. These MoUs are expected to generate 1,200 direct and 2,600 indirect employment opportunities.

According to Odisha's 2022 Renewable Energy Policy, solar and wind power projects will be built on a Build-Own-Operate-Transfer basis, with an initial operation period of 40 years. This operation period can be extended up to an additional 30 years permitted through Odisha's government. Where projects are directly awarded to a special purpose vehicle (SPV) or joint venture (JV), the Odisha government will facilitate and determine a developer through a "transparent competitive bidding process". Power may be purchased up to the entire amount of power produced by the project, but Odisha government has the right to refuse up to 20% of the power from this project, which will be known at the time of bidding. Small-scale solar projects, or solar parks, can sell power within the state, outside or be used entirely by private industry.

Finance

Clean energy investments have recently expanded in India, reaching USD$68 billion in 2023 and representing a 40% increase relative to 2016-2020. Nearly half of this spending focused on low-carbon power sector technologies, though investments need to increase by an estimated 20% to meet India’s climate and clean energy goals. Meanwhile, coal spending also increased to reach USD$33 billion in 2023. Despite this, globally, the cost of capital has increased in recent years which has made local currency financing more expensive. This is particularly evident in India and other emerging economies where local currency financing is more prevalent.

Approximately USD $386 billion, or Rs 32.45 lakh crore, has been committed for renewable energy projects across India, according to the country's power and renewable energy minister.

Potential providers of wind/solar finance

Public Sector Finance

District Mineral Foundation: iForest estimates that over ₹1.9 trillion can be available for a power transition in Angul, Odisha through coal cess and District Mineral Foundation (DMF) funds in the next 20 years. The DMF is a grantmaking organization intended to provide funding for projects that improve the quality of life for communities affected by mining, in an attempt to create a "benefit sharing" mechanism for locals. After each mine lease auction, 10% of the money from winning bids is placed into the fund. While 60% of the fund is intended for high priority ventures like improved drinking water and healthcare, the other 40% can be used for physical infrastructure development, irrigation, energy and watershed development, and other projects that enhance environmental quality in areas located near mines. The DMF is a nonprofit body with trusts controlled by each State Government. Total accrual in Odisha's DMF fund is Rs. 2,642.71 crore as of May 2024.

In early 2024, President Modi approved a government investment of ₹15,336 crore to support electrification of Particularly Vulnerable Tribal Groups in 18 states. The goal is to use solar to electrify one lakh off-grid households from 2023 through 2026. The Central Government's investment is matched by ₹8,768 crore provided by states.

The Department of Energy is to set up a Renewable Energy Fund to provide Viability Gap Funding (VGF) for floating solar projects/PSH/BESS, power evacuation infrastructure, research on RE technologies/ energy transition and funding the RE Research Institute in the State.

The Odisha Department of Energy forged three Memoranda of Understanding (MOUs) with prominent Central Public Sector Undertakings (CPSUs) at the 2022 Make in Odisha Conclave, securing investments of INR 51,000 crores. These agreements encompass expansive solar, floating solar, pumped storage, and green hydrogen projects. Anticipated outcomes include 1,200 direct and 2,600 indirect job opportunities, with a planned installation of 4 GW of solar projects and 3 GW of pumped storage hydropower. Several state-owned companies have provided investments, namely GEDCOL, NEEPCO, NHPC, SJVN, NLC, and NTPC Green Energy.

Potential funding sources included in the Odisha Climate Change Action Plan (2018-2023) are the following:

• The state budget, the state Public Sector Undertaking (PSU) budget, and the budgets of the parastatals in the state (e.g., OMFED, which is implementing fodder development and biogas programs),
• Mission-related allocations (e.g., solar mission-related subsidy and subventions),
• Central sector schemes and centrally sponsored schemes (e.g., components of the Jawaharlal Nehru National Urban Renewal Mission, JNNURM),
• Further project submission to national and International funds.

Other sources of climate finance mentioned in the Odisha Climate Change Action Plan (2021-2030) are below:

• International climate funds (Green Climate Fund, Global Environment Facility, Adaptation Fund),
• Bilateral cooperation (additional financial and technical support for climate change outcomes like SDC, GiZ, JICA, DFID),
• Multilateral organizations (loan and grant projects through WB, ADB, UNDP, etc.),
• National Climate Fund (National Adaptation Fund for Climate Change, Small Grants program, mission-specific allocation, regular schematic allocation having climate relevance).

In the 2023-2024 state budget, Odisha has allocated Rs. 50,00,00,000 in total grants for renewable energy development in 2023-24, with Rs. 6,77,25,000 in grants specifically designed for the establishment, operations, and maintenance.

Private Sector Finance

Private sector actors have expressed interest in investing in energy projects in Odisha, though many are focused primarily on hydrogen development. See "Other" in the finance section below.

Just Energy Transition Partnerships

The G7 countries—Germany, Italy, Canada, France, Japan, the United Kingdom, and the United States—expressed their intent to negotiate with India on a Just Energy Transition Partnership (JTEP). However, there are concerns that India will not accept the partnership, as it hinges on a coal phaseout timeline provision.

Other

There are private companies such as ACME Group seeking to invest in green hydrogen, green ammonia, and a complementary captive solar plant as well.

The High-Level Clearance Authority (HLCA) committee of the Odisha government greenlit ACME Clean Energy's proposal, entailing an investment of INR 58,209.13 crore. This venture encompasses the establishment of a green hydrogen and ammonia plant in Kujanga, Jagatsinghpur, with a 1.1 million-tonne capacity, alongside a 4,500 MW solar power plant in Koraput and Kalahandi districts. It is expected to generate employment for around 1,500 individuals in the state.