As Odisha bets big on renewable power sources to meet its energy 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 2,750 Mw by 2022. Of this, solar would have the lion’s share at 2200 Mw, followed by wind at 200 Mw, biomass at 180 Mw, small hydro electric projects at 150 Mw and waste to energy sources at 20 Mw. Data by the Central Electricity Authority (CEA) shows Odisha, in 2016, had an installed capacity of 9,422 Mw of power out of which conventional power met 7,104 Mw. The share of renewable energy was meagre 2%. The state plans to increase the renewable energy capacity to 1,450 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 de-centralised 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 roof top 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 2,750 Mw capacity of green 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 one 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.