Cases pending at the Supreme Court and instances where the Central Pollution Control Board has imposed penalties not touched by the Ministry
In view of several thermal power plants likely missing out the government’s 2022 deadline for installing equipment to minimise pollution from their operations, Power Minister RK Singh has in a letter to the Ministry of Environment, Forests and Climate Change (MoEF) last week recommended the deadline to be extended by up to 2 years for over 300 such units.
The minister told The Indian Express in an interview, “I believe it (the extension) is necessary”, adding, “The final decision on this matter would be taken by MoEF and, in specific cases, the Supreme Court.”
According to the minister, out of the total 448 units planned for flue-gas desulfurization (FGD) systems, which removes SO2 from exhaust flue gases, the ministry has recommended 322 ones with capacity worth 1 lakh megawatt (MW) for an extension, while also stressing it is “not touching” cases pending at the Supreme Court and instances where the Central Pollution Control Board has imposed penalties.
“We are not recommending two years for everybody. There are some cases where we are not recommending (an extension) where they are already in progress”, the minister said, adding, “All told, the different categories will require different timelines for extension. There are some categories where the bid, etc., has already happened…and the work had started before (Covid-19) hit us. So they will require less extension”.
The process of commissioning flue-gas desulfurization (FGD) systems for thermal capacity has been conducted in a “phased” manner that consists of a feasibility study, following which tender specifications are made and Notices Inviting Tenders (NIT) are issued. Bids are awarded based on this, following which the FGD is commissioned.
As on August 11, the feasibility studies were yet to start in around 10 units consisting of 3,560 MW from among the 448 units comprising nearly 1.70 lakh MW capacity. Of the remaining 438, feasibility studies had been conducted on around 416 units (1.57 lakh MW), tender specifications made for 329 (1.31 lakh MW), NITs issued for 294 (1.20 lakh MW) and bids awarded for 130 units (58,000 MW). Finally, FGD has been commissioned for four of these units (1,740 MW).
The feeble progress in addressing the environmental damage on account of the country’s massive fleet of aging and inefficient coal- and lignite-fuelled thermal power plants, most of which are highly polluting in terms of carbon dioxide and sulphur dioxide emissions, has resulted in blunting India’s green push. This move to push the deadline had come at a time when newer, cost-efficient and lesser polluting supercritical thermal plants are struggling to get customers or coal, while the inefficient, highly polluting and aging plants continue to sell costly power under the protection of long-term power purchase agreements (PPAs) to DISCOMs.
The Power Ministry had informed the Environment Ministry In June 2017 about 165.9 gigawatts (GW) out of the total of 187.1 GW, or 89 per cent of the country’s existing coal-based power capacity being not in compliance with the sulphur dioxide (SO2) emission limits notified in 2015.
Even though the 2015 norms stated all existing coal-based plants need to follow emission limits by December 7, 2017, the ministry said it would take “seven years” to “retro-fit” FGD systems in the existing capacity, adding that the remaining 19.9 GW of the aforementioned 165.9 GW capacity either does not have “space” or is “not interested” in installing FGD systems. A plan regarding installation of FGD systems in the plants under construction was “yet to be decided”, it said.
According to the minister, although progress in getting thermal plants to install FGD systems, including drawing up the scheme, holding bids and placing work orders, happened “in a large number of cases” after 2017, several thermal units have been facing challenges, including uncertainty over tariff enhancement due to the additional investment required to install these units, which led to banks being reluctant in financing the exercise.
“One major issue is that of financing. The banks were reluctant to finance…because they said that there has to be a visibility of enhanced tariff on account of the additional investment which is being made, which is almost ₹55 lakh per megawatt”, said Singh.
There’s another issue, and it is related to the government’s Make in India push and the ensuing requirements for a large proportion of value addition in capacity to be domestically sourced.
“Right now, we have mandated 80% to be the least value addition in India. A lot of that capacity is already there, while some capacity is being added.” he said, adding, “The Covid-19 lockdown is another major factor…that is about a minimum of six months in which that much extension is necessary.”
While being inefficient, the old coal/lignite thermal power plants, in an interesting paradox, are also operationally inflexible and not capable of quickly changing their output (ramping up or down) in tandem with the RE generations giving varying output each time of the day. On the contrary, modern supercritical power plants are capable of flexing their generation, and are indispensable for integrating large-scale RE, as India has limited gas power plants and just a few pump storage hydroelectric plants required to support the variable nature of RE generation.
Only 1% of the total coal-fired power plant capacity required to comply with the emission standards under the current phasing plan, have installed the mandatory FGD systems, according to Centre for Research on Energy and Clean Air (CREA) data. Of the total coal-fired capacity in the country, plants with only 27% capacity have been awarded bids for FGD implementation. Around 72% capacity have not even awarded the bids, according to the data.
