Odisha Power Transition: State Needs ₹1.1 Lakh Cr Investment

21 Oct 2026, 09:37 by Vinay Kakkad · KalingaTV

Odisha has a big economic and infrastructure challenge ahead if it wants to shift away from its heavy reliance on coal and oil over the next decade.

To build enough green energy projects, battery storage, and power lines by the financial year 2035–2036, the state will need about ₹1.1 lakh crore in funding, according to a report by the Institute for Energy Economics and Financial Analysis (IEEFA).

Why the Shift Is Challenging

Today, Odisha’s state budget and overall economy rely heavily on traditional fossil fuels:

Government Revenue: In the 2024–2025 financial year, coal and petroleum brought in an estimated ₹14,148 crore—making up 13.1% of the state’s direct tax and non-tax income.
Overall Economy: Industries linked to fossil fuels generate about one-third of Odisha’s total economic output (gross value added).

How the Money Needs to Be Spent

To turn things around, spending will need to ramp up significantly over the next few years. Annual funding needs are projected to peak in the 2029–2030 financial year at roughly ₹20,827 crore.

Here is where the ₹1.1 lakh crore needs to go:

67% to build new renewable energy plants (solar and wind)
21% for energy storage facilities
12% to upgrade local power lines and electricity grids

According to planning figures from the Central Electricity Authority, the state will need to add:

10.7 gigawatts (GW) of clean power capacity
2.7 GW of pumped-water energy storage
0.13 GW of battery energy storage
Upgraded local transmission networks to move power reliably across the state

Huge Untapped Natural Potential

Odisha produces very little clean energy today compared to what its geography naturally allows:

Solar: The state has an estimated potential of 139.5 GW, but only 0.82 GW is currently operating.
Wind: While there is an estimated potential of 12.13 GW, Odisha currently has zero wind power connected to its electricity grid.
Hydropower: Around 2.2 GW has been built out of an estimated 7.6 GW of water power potential.

Because so little clean energy has been installed, green power accounts for only 11.3% of Odisha’s current electricity supply. That falls well behind the official state target of 33.01% set for 2026, which is scheduled to rise further to 43.33% by 2030.

IEEFA pointed out that if Odisha builds the necessary power stations, storage, and transmission lines, it could go beyond meeting its own needs and actually sell surplus clean electricity to other Indian states.

To fund this massive transformation, the report recommends a practical three-step plan:

1. Calculate the exact costs of moving away from fossil fuels across all major industries.

2. Put clear green finance guidelines in place to make projects attractive to investors.

3. Set up a dedicated state transition fund.

This special fund would combine money from the government, international lenders, climate programs, and private companies. Beyond funding new power projects, the money would protect communities in coal-mining districts—supporting job training for workers, cleaning up closed mines, repairing damaged land, and helping local economies build new industries.