Dikhyaa Mohanty 
According to a senior industry official, the state might draw investments worth Rs 15,000–20,000 crore in the power sector over the next six to twelve months as a result of the Odisha government’s move to compel the provision of 5% of capacity from recently commissioned thermal power plants at variable prices. When it comes to following the Central Electricity Authority’s recommendation to set aside 5% of capacity at variable rates for state usage, Odisha has been an exception among the states.
Rather, it has stuck to the 2008–09 strategy that required a 14% allocation, which was lowered to 12% for projects with local coal connectivity. Despite the state’s vast coal reserves, this comparatively larger allotment has been identified as a major impediment preventing new investment inflows. Investment patterns over the last ten years show this disparity. Nearly 80% of greenfield thermal power investments have gone to Odisha, compared to Chhattisgarh, another coal-rich state that has experienced significant power investments, according to Inder Keshari, Director General, Association of Power Producers. Investment loss to Odisha “Odisha has all the necessary conditions for the expansion of the power sector—plenty of raw materials, ports, a developing economy, and access to skilled labor.”
However, developers have been discouraged by the increased required allocation of electricity at variable cost. On the other hand, Chhattisgarh’s change to a 5% quota has enabled investments totaling more than Rs 1.5 lakh crore, leading to the development of more than 16 GW of capacity. In contrast, less than 4 GW of capacity has been established in Odisha, resulting in investments of less than Rs 40,000 crore, he stated.
Industry interest in Odisha is now reviving, with companies such as Jindal Power, Vedanta, and Adani evaluating opportunities in the state. New regime advantage Explaining the financial implications of the earlier policy, Keshari noted that thermal power project costs have sharply escalated—from around Rs 5 crore per MW earlier to nearly Rs 15 crore today. Consequently, fixed costs have risen from approximately Rs 1 per unit to nearly Rs 4. Under the earlier framework, concessional supply obligations led to a marginal tariff impact of around 14 paise per unit for other consumers.
