Kanak Vardhan Singh Deo, Deputy Chief Minister of Odisha

Odisha is positioning itself as a major hub for green hydrogen in India, with industry proposals totalling 5.46 million tonnes per annum (mtpa) — 2.95 mtpa at Gopalpur and 2.51 mtpa at Paradip. The State government is confident of turning these proposals into reality.

“Unlike some other states, we have the fiscal strength to honour our commitments,” says Vishal Kumar Dev, Odisha’s Principal Secretary (Energy and IT).

He told businessline on the sidelines of the Global Energy Leaders’ Summit in Puri recently that Odisha has ₹32,000 crore revenue surplus, the country’s highest capex-to-GSDP ratio of 6.11 per cent, and a debt-to-GSDP ratio of 13.5 per cent, down sharply from 54 per cent in 2000. (The State has allocated ₹58,195 crore towards capital outlay in the 2025-26 budget, which is about 6.1 per cent of GSDP.)

This fiscal strength has enabled Odisha to offer 30 per cent capital subsidy to green hydrogen projects (along with select other industries), and power cost reimbursement of ₹3 per kWh for green hydrogen producers, compared with ₹2 per kWh for certain thrust sectors.

Industrial power tariffs in Odisha are among the lowest in the country, Dev said, adding that the landed cost of electricity for industry is around ₹6.5 per kWh. A key advantage is the State’s 10,000-odd MW hydropower capacity. Some older hydel plants sell power to the utility for as low as 90 paise per kWh.

Fiscal sustainability

Odisha is one of India’s leading coal producing states. However, the State believes it can transition away from coal without compromising its fiscal strength, as affirmed to businessline by both Dev and Deputy Chief Minister Kanak Vardhan Singh Deo (who also holds the energy portfolio). Coal, they said, will remain relevant for some years, giving Odisha time to manage the transition.

businessline’s research shows that while Odisha earns ₹5,000-6,000 crore annually from coal, revenue from other minerals — bauxite, iron ore, chromite and manganese — amount to roughly ₹35,000 crore.

Singh Deo said income from other minerals could effectively replace coal revenues. He also pointed to the State’s untapped tourism potential. The new government, which assumed office in mid-2024 after replacing the Naveen Patnaik administration, is keen to develop tourism as an additional revenue stream.

While rail connectivity has improved significantly over the last decade, Singh Deo said air connectivity needs substantial enhancement. Plans are underway to expand runways at several existing airfields, and a proposal to build an international airport at Puri is under examination by the central government.

Renewable energy push

Renewable energy is emerging as a key growth sector for Odisha. While the State is not yet prominent on India’s renewable energy map, it aims to build 10 GW of renewable capacity by 2030. Floating solar power is likely to be a major area of thrust.

“We have 3 per cent of India’s population but 11 per cent of its water resources,” Dev noted. Odisha has eight major, 11 medium and around 50 minor reservoirs — why not use them?

Much of the State’s land is under agriculture, so it’s difficult to find large tracts of barren land for ground-mounted solar projects. While the State-owned Odisha Industrial Infrastructure Development Corporation is examining land-leasing models adopted elsewhere, floating solar offers a compelling alternative.

The State recently invited applications for floating solar projects and received a “very good” response, according to Dev.

With support from transaction advisor IFC, Washington (part of the World Bank Group), Odisha is preparing to issue a tender for 1,000 MW of floating solar capacity at Upper Indravati.

Floating solar is costlier, Dev acknowledged, while adding that the costs — particularly for floats — are expected to decline with scale. He also noted that the central electricity regulator has recommended higher tariffs for floating solar, suggesting that distribution utilities may be willing to absorb the additional cost.

Pumped storage

Upper Indravati is also the site of one of three State-owned pumped storage projects (PSPs) — a 600 MW plant at Upper Indravati, a 500 MW project at Balimela, and a 600 MW facility at Upper Kolab. Tenders have been issued for Upper Indravati, while bids for the other two are expected in the coming months.

Beyond these government projects, Odisha has identified 45 potential PSP sites with an aggregate capacity of about 30,000 MW. Dev said pumped storage is a superior option to battery energy storage systems. PSPs have operational lives of 50-60 years and can store energy for longer durations. Once capital costs are recovered, the storage service is effectively free.

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Published on December 22, 2025