Odisha Needs Rs 13500 crore Investments in Renewable Energy by 2022

The state government of Odisha has envisaged a renewable energy capacity of 2750 MW by 2022

As Odisha bets big on renewable energy sources to meet its power requirement in the future, it needs an investment of Rs 13,500 crore by 2022, according to the estimates of KPMG.

The KPMG analysis is based on the premise of Odisha’s capacity addition targets from green power. The state government has envisaged a renewable energy capacity of 2750 Mw by 2022. Of this, solar would have the lion’s share at 2200 MW.

Data by the Central Electricity Authority (CEA) shows Odisha, in 2016, had an installed capacity of 9422 MW of power out of which conventional power met 7104 MW. The share of renewable energy was meager 2%. The state plans to increase the renewable energy capacity to 1450 MW by 2019, accounting for 14% of the energy requirement.

The Odisha government is looking to scale up energy significantly in the coming years covering both grid and decentralized mode. The state has come out with an exclusive policy for the renewable energy with a corpus fund of Rs 250 crore.

KPMG has identified a few critical aspects of implementing the renewable energy capacity ramp up programme that include demand and business model, coexistence of grid and off-grid infrastructure, meeting the investment requirement and financing challenge, execution focus and engaging with the external ecosystem.

Commenting on the financing challenge, Anish De, partner (Infrastructure, Government and Healthcare), KPMG said: “For rooftop solar projects, financing can be done by the consumers or lease financing. To develop the large ground mounted projects, banks and corporate financing can do. The target of adding 2750 MW capacity of renewable energy by 2022 is challenging but achievable.”

To address the issues related to demand and business models, KPMG has called for a clear mapping of current and future demand clusters and model options to suit the requirement. Odisha’s 307,000 un-electrified households can be divided into three clusters, where mini-grid, micro-grid and solar home systems can be installed depending on the suitability.

In terms of execution, 34 solar parks with aggregate capacity of 20 GW are under development in 21 states. Odisha’s target is pegged at 1 GW. But, most of the solar projects are in the land identification and acquisition stages. Non-availability of contiguous land parcels, inadequate transmission infrastructure, power evacuation, road access, lack of innovative financing mechanisms and premature tendering by governments remain as the key barriers. Then, there are challenges associated with execution like integration issues, delay in approvals, labour deployment, quality issues, foreign exchange fluctuations and price variations.

Source: Business Standard