Power Generation in Odisha - Thermal, Hydro, and Renewable

Overview of the Power Sector

Odisha is a power-surplus state, one of the few in India, with an installed power generation capacity exceeding 15,000 megawatts from all sources (as of 2023-24). Thermal power (coal-based) is overwhelmingly dominant, accounting for approximately 85 per cent of installed capacity. Hydropower contributes around 10-12 per cent, and renewable sources (solar, wind, small hydro, biomass) account for the remaining 3-5 per cent, a share that is growing rapidly with new solar and wind capacity additions. The state’s power sector is characterised by a mix of central sector generating stations (NTPC, NALCO), state sector undertakings (OPGC, OHPC), and a large number of independent power producers (IPPs) and captive power plants operated by industries. Odisha’s power surplus status is driven primarily by the concentration of pit-head thermal plants in the Talcher-Ib Valley coal belt, which generate power at among the lowest variable costs in the country.

Thermal Power: The Backbone

Odisha’s coal-fired thermal power stations are concentrated in two belts: the Talcher belt in Angul district and the Ib Valley belt in Jharsuguda and Sundargarh districts, both located on the coalfields, ensuring zero or negligible coal transportation costs for many plants.

NTPC Talcher Super Thermal Power Station, with an installed capacity of 3,000 megawatts (4 units of 500 MW and 4 units of 250 MW in the original station, with newer units in the Talcher Kaniha complex), is the largest power station in Odisha and one of NTPC’s flagship stations. NTPC Talcher Thermal Power Station (460 MW, one of the oldest stations in India, commissioned in 1968) is undergoing replacement with a new 2,600 MW ultra-supercritical plant. The Odisha Power Generation Corporation (OPGC) operates the Ib Thermal Power Station at Banaharpali in Jharsuguda district with an installed capacity of 1,740 MW (after the expansion completed with AES Corporation).

Captive power plants operated by aluminium and steel industries contribute a substantial share of the state’s generating capacity: NALCO’s captive power plant at Angul (1,200 MW, supplying the aluminium smelter), Vedanta’s captive plant at Jharsuguda (1,215 MW for the smelter), Jindal Steel and Power’s captive plants at Angul (over 800 MW), and Tata Steel’s captive plant at Kalinganagar (202 MW) are the major ones. Additionally, numerous independent power producers (IPPs) — GMR Kamalanga (1,050 MW), Jindal India Thermal Power (1,200 MW), Sterlite Energy, and others — have set up merchant power plants that sell electricity through the national grid.

Hydropower

Odisha’s hydropower potential is estimated at approximately 3,000 MW, of which a significant portion has been harnessed. The major hydroelectric stations include:

The Odisha Hydro Power Corporation (OHPC) operates most of the state’s hydroelectric plants. These hydro stations serve as peaking power plants, ramping up generation during evening demand peaks and conserving water during low-demand periods. The multi-purpose reservoirs also provide irrigation water and flood control. However, hydropower generation in Odisha is highly seasonal, concentrated in the monsoon and immediate post-monsoon months when reservoir inflows are high, and dropping significantly during the dry months. Siltation of reservoirs (particularly Hirakud) is gradually reducing the live storage and hence the firm hydropower potential. There is limited scope for additional large hydropower in Odisha, as most of the favourable dam sites have been exploited.

Renewable Energy: The Emerging Frontier

The share of renewable energy in Odisha’s generation mix is modest but growing rapidly, driven by national targets (500 GW non-fossil capacity by 2030) and declining costs of solar and wind technology. The state’s solar energy potential is estimated at about 20 gigawatts, and the installed solar capacity as of 2024 exceeds 500 MW. Solar parks are being developed at numerous locations including at the periphery of the Hirakud reservoir (floating solar) and in the drier western districts that receive high solar insolation. Wind energy potential is primarily along the coast and in the highland areas of the Eastern Ghats, with an estimated potential of about 1.7 GW, but installed capacity remains modest. Small hydro projects (up to 25 MW) on the hill streams of the Eastern Ghats, biomass power from agricultural residues (particularly rice husk), and waste-to-energy projects are other renewable sources being explored.

The state has formulated the Odisha Renewable Energy Policy to attract investment, offering incentives including stamp duty exemption, electricity duty exemption, and single-window clearance. GRIDCO, the state’s bulk power procurement and trading company, has been issuing tenders for solar and wind capacity to meet the Renewable Purchase Obligation (RPO). The transition to a higher share of renewables will require investment in grid infrastructure for handling intermittent generation, battery storage, and the retraining of workers currently employed in the coal-based thermal sector. The social and economic implications of the energy transition are particularly significant for Odisha, given the dependence of several districts on coal mining and thermal power for employment and revenue.