Emission Control : Power Plants missed the Deadline

Context

The Ministry of Power is recommending to extend the deadline by up to two years from 2022 for installing equipment to minimise pollution from the operations of coal-based Thermal Power Plants.

Background

The agenda for installing pollution reducing equipment at coal-based power plants, already facing challenges, has to reckon with an apparent disruption of the supply chain following the ban on import of power equipment from China. Taken together with the reluctance of lenders to inject more capital in the stress-ridden sector and the uncertainty over its impact on power tariffs, this means the Centre’s 2022 deadline for installing flue gas de-sulphurisation (FGD) units in plants with a capacity of 1,65,942 MW is likely to be missed.

Reasons for Lapse Deadline

Lack of clarity on the tariff hikes which would be allowed in lieu of equipment installation. While the power ministry has clarified that FGD installation would be treated under the ‘change in law’ provision, implying the expenses would be passed on, discoms are challenging the tariff hikes approved by the Central Electricity Regulatory Commission (CERC). Thus without confirmation from discoms, financing institutions are unwilling to finance FGDs, as there is uncertainty over cost recovery.

There are many advantages of moving on FGD for coal-fired thermal power plants in the country. Not only is it an investment opportunity ripe for the taking, it has obvious environmental and social benefits.

As per initial estimates, the cost of FGD installation is Rs 27-45 lakh per MW, and would necessitate a rise of Rs 0.62-0.93/unit in power tariff. However, several power plants have pointed out to the CERC that the actual costs are higher. CLP India’s 1,320 MW Jhajjar power plant, a unit of the Hong Kong-based CLP Holdings, is currently the only private station to have commissioned such equipment.

The ban on Chinese equipment is also delaying the FGD tendering process, as even local companies manufacturing the machines are dependent on imports. According to sources, about 30% of FGD components have to be imported, with most of these coming from China.

Environmental Activism

Environmental Activist argue that to curb sulpur dioxide emissions, FGD units would end up producing a similar quantity of carbon dioxide and also lead to an increase in mining activity, as limestone is required to run the units, they say. They pointed out to the National Green Tribunal (NGT) that these units would also produce more than 10 MT of chemical gypsum, the disposal of which would be an added burden for power plants. The NGT forwarded it to the Central Pollution Control Board (CPCB).

Pollution By Thermal Power Plants

• Causes respiratory ailments.
• Affects historic structures.
• Causes climate change.
• Affects water quality and thus reduces the quantity available for human consumption.
• Affects fishing as hot water let into sea kills or causes migration of marine species.
• Limits crop cultivation due to increase in alkalinity of soil.
• Limits crop cultivation as land available for agriculture reduced.
• Affects plant growth.
• Affects livelihood for farmers and fishermen.
• Increases risk of accidents due to hazardous working conditions

Way Forward

The primary obstacle is the high investment cost for each plant, amounting to Rs 0.5 crore per megawatt (MW) of installed capacity, or around Rs 1,000 crore for a 2,000 MW power plant.

The following measures would help accelerate financing approvals for the FGD mega-investment programme:

● Provisional tariff increases for contracted plants.
● Cost pass-through for uncontracted plants.
● Waiver of clean energy cess.

Connecting the Article

Question for Prelims

Consider the following statements regarding Central Pollution Control Board:

1. It was established under the Water (Prevention and Control of Pollution) Act, 1974.
2. It can impose penalties on any industry for violation of rules.

Which of the statements given above is/are correct?

(a) 1 only
(b) 2 only
(c) Both 1 and 2
(d) Neither 1 nor 2

Question for Mains

Discuss the necessity of non-polluting sources of energy particularly in the context of India.