Odisha Announces Incentives for Consumers Under Renewable Energy Policy, 2022

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The Odisha government has released its renewable energy policy, which aims to provide the necessary impetus to the solar sector and accelerate its adoption in the state.

The policy has outlined the state’s intention to promote renewable energy consumption, especially through captive and open-access modes. It has announced a slew of exemptions to attract industry and businesses from across the country.

The policy intends to promote solar parks having a minimum capacity of 25 MW to reduce the cost of generation and the associated infrastructure.

It will remain in force until March 31, 2030, or until the state government announces a new policy.

Exemptions for Captive/Open Access Consumers

The state government will extend a ₹0.50 (~$0.006)/kWh concession on electricity duty to captive and open access consumers of renewable energy, along with energy storage projects.

It will be available for 15 years from the commissioning of the projects.

Further, a 50% exemption would be applicable on the cross-subsidy surcharge for 15 years from the commissioning dates of projects.

Along with this, an exemption of ₹0.20 (~$0.002)/kWh on state transmission utility (STU) charges will be available for 15 years.

If the project is commissioned before March 31, 2026, the STU exemption will be extended for five more years, amounting to 20 years in total.

Further, the policy provides for a 25% reduction in wheeling charges for consuming energy from projects commissioned in the state for 15 years.

The government has also stated that the government land earmarked for the industry under the ‘Land Bank’ program will be allotted for renewable energy projects.

Rooftop Solar

The Odisha Renewable Energy Development Agency (OREDA) will aggregate the demand from various government departments and conduct bids to facilitate rooftop solar deployments on government buildings.

All the distribution companies (DISCOMs) in the state would procure the power at the tariff determined by the Odisha Electricity Regulatory Commission (OERC).

The subsidies will be provided to rooftop consumers per the guidelines of the central or state government.

Distributed Solar 

The policy would promote the solarization of existing irrigation pumps under the Pradhan Mantri Kisan Urja Suraksha evam Utthaan Mahabhiyan (PM-KUSUM) program.  

Further, the government plans to deploy technologically advanced solutions like agri-PV to allow maximum land utilization by combining agricultural production with energy generation on the same land.

Floating Solar

The projects will be developed on a build, own, and operate basis, and the sites will be awarded for an initial period of 30 years and may be extended by five more years per the state government’s approval.

Solar-based EV Charging Stations

The nodal agency will propose appropriate mechanisms to avail solar power for electric vehicle (EV) charging under non-park solar and rooftop solar mechanisms.

Solar installations for EV charging will be eligible for a 50% concession on land lease payment for the first 50 MW of installations during the policy period.

Wind

The wind projects in the state will be awarded on a first-come, first-serve basis. No windmills will be allowed to be set up within 1 km of any habitation having ten or more households.

The nodal agency will allot identified sites to public and private sector units, with each entity getting a maximum of 50 MW capacity up to a cumulative total of 500 MW.

Such a cap of 50 MW for an entity will not apply to state and central public sector units.

OERC may determine a generic tariff for all wind projects allotted under the mechanism and commission before March 31, 2028.

Large Hydro

If the project is not awarded to any public sector units or their joint ventures, the nodal agency will conduct a competitive bidding process for selecting the developers to develop identified projects.

GRIDCO will procure the full power from the projects at the tariff determined by OERC.

For projects planning to sell power outside the state, 12% of free power in addition to 1% local area development fund will be charged per the National Hydropower Policy.

Pumped Hydro  

The pumped hydro projects will be eligible for viability gap funding from the central or state governments as per the government’s decisions.

Small Hydro  

The initial concession period for all projects will be for 40 years and may be extended by the government. At the end of the concession period, the projects will be transferred to the state government.

Biomass  

The government will ensure feedstock availability, and wasteland will be made available at suitable locations for raising energy plantations to meet up to 20% of the annual biomass fuel requirement.

Green Hydrogen and Green Ammonia

The incentives and concessions will be in accordance with the national policy announced from time to time.

Banking

Banking facility will be allowed for open access and captive power projects within the state on a monthly basis. The drawal of banked energy will not be permitted during peak hours.

OERC will determine the applicable banking charges.

Renewable Projects with Storage Systems

The DISCOMs and the Odisha Power Transmission Corporation would be encouraged to install battery energy storage systems to mitigate the challenges posed by the intermittent nature of power from renewable sources.

The policy also aims to promote the deployment of mini and microgrids in remote areas with intermittent supply.

Renewable Purchase Obligation

The OERC will determine a trajectory for the renewable purchase and energy storage obligations until FY30 based on the order passed by the Ministry of Power.

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