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Policy guidelines on power generation from non-conventional energy sources 2005

Date of issue

3 December 2005

Title of policy document

Policy Guidelines on Power Generation from Non-Conventional Energy Sources

Nodal agency

Odisha Renewable Energy Development Agency (OREDA)

Capacity target and period


Offtake arrangement

Power Purchase Agreement (PPA)

PPA with the Licensees to be approved by Orissa Electricity Regulatory Commission (OERC)

Use for captive

Energy from the project not utilised during the year by the developer for his captive use will be treated as sold to Grid Corporation of Odisha Ltd (GRIDCO)/ Odisha Distribution Company (DISTCO) at the price to be negotiated with them and approved by OERC.

Sale to third party


Grid interfacing

Biomass Power Producer (BPP)

Grid interfacing with the generating units to be constructed by developers at their own cost.

Main and check meters to be installed by the developer at the interconnection points of GRIDCO/ DISTCO substation after testing.

Scheme for inter connection to the nearest substation shall require the approval of GRIDCO / DISTCO and shall form the part of Detailed Project Report (DPR).

Wheeling charges

Allowed, subject to payment of transmission/ distribution and wheeling charges both for captive use and outside the State use as approved by OERC.

Banking charges

Banking of energy generated through a captive renewable energy plant shall be allowed on annual basis. The financial year shall be reckoned for the purpose. Unutilised energy during the year shall  be subjected to rates negotiated between the parties. 2.5% of energy dispatched shall be deducted towards banking charges.

Open access


Registration of projects

Eligible entrepreneurs to apply to Chief Executive, OREDA in the prescribed format for obtaining Government approval.
If Grid interface is required, approval of GRIDCO/ DISTCO will be necessary.
If the applicant does not take effective steps to implement the project within 6 months from the date of possession of land, the agreement shall be terminated.

Procedure for setting up Renewable Energy (RE) projects

  • Chief Executive Officer (CEO), OREDA will make a list of all such projects with salient
        details available to the intending producers, along with brief pre-feasibility reports on
        payment of Rs 500 per set.

  • CEO will advertise, in the month of January every year, all the feasible projects available
        (including the ones left out during the previous year), inviting letters of interest asking for
        offers from interested producers. Offers received will be considered on a quarterly

  • Preference will be given to the captive producer.

  • Projects will be divided into Captive Power Plant (CPP) and Independent Power Plant
        (IPP) groups. State Government to allocate project through Memorandum of
        Understanding (MOU) on receipt of report from the CEO, OREDA. In case of more than
        one application for a single project, the same will be short listed by the State Technical
        Committee (STC) through pre-qualified process. In case there is no response for any
        particular project, the same will be assigned on a “first cum first serve” basis.

  • State Government to allocate the project based on pre-qualification evaluation
        judged by STC.

  • Producer to prepare DPR along with Power Evacuation Agreement (PEA) and submit to
        the CEO, OREDA and DISTCOS/ any lawful authority for approval. The CEO processes
        the DPR for placement before the STC.

  • STC to scrutinize and approve DPR on receipt of PEA clearance from GRIDCO/DISTCOS/
        any lawful authority.

  • The captive plant developer to set up the project after seeking permission of OERC.

  • IPP producer shall prepare the tariff schedule for sale of power and submit the same to
        GRIDCO/DISTCOS and State Government through the CEO for approval. On receipt of
        approval they would take up the project.

  • DISTCOM / State Government may approve the tariff if the cost per kWh is within 10% of
        the highest cost of energy purchased by the DISTCO during the year from any source.If
        the cost is higher than the limit, it will be subjected to detailed scrutiny and specific
        approval of the State Government considering the transmission and distribution losses
        for power transmission.

  • DISTCOS will adopt a sample PPA document through which the IPP producer will enter
        into a long term agreement with the DISTCOS.

  • All commissioned projects to be reviewed for their fitness and power generation
        capabilities every two years by OREDA.

  • In the event of project work not being started within a year of approval of the PPA, the
        MOU and PPA will automatically stand cancelled.

  • Time schedule and penalty provisions


    Incentives by State Government


    Electricity duty


    Land allotment

    Government land earmarked for industry under the Land Bank scheme and other Government land, whenever applicable, will be allotted for units generating power from RE sources.

    Contact details

    Odisha Renewable Energy Development Agency
    S-59, Mancheshwar Industrial Estate
    Nayapalli, Bhubaneswar 751 001
    Tel: 0674 2588260

    Policy document


    * NA - Not Applicable
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