The Real Mainstream: Can The Thermal Power Sector Be Trusted Again?

The Real Mainstream: Can The Thermal Power Sector Be Trusted Again?

In the heydays of ‘India Shining’ in 2003, the ministry of environment and forests (MoEF) had experimented with an alternate model to control pollution from industries. The model was named ‘Corporate Responsibility for Environment Protection’, or CREP. It was based on the principle of voluntary compliance: instead of the government imposing pollution standards, industries were encouraged to voluntarily commit to a self-defined standard. Seventeen highly polluting industrial sectors, including the coal-based thermal power, submitted their commitments. Coal thermal power plants (TPPs) committed to meet suspended particulate matter (SPM) standard of 100 mg/Nm3 from 2003 onwards. They agreed to develop stringent Sulphur Dioxide (SO2) and Nitrogen Oxide (NOx) standards and meet them from 2005 onwards. They also committed to voluntarily develop standards for mercury and other toxic heavy metals by December 2003, and abide by them subsequently. The Central Electricity Authority (CEA), the key policy and planning authority for the electricity sector, was made responsible for ensuring that these commitments were met. Not surprisingly, none of these commitments was met. The MoEF forgot about CREP; the CEA overlooked its commitment and TPPs continued with business-as-usual. Fast-forward 11 years—in 2014, the ministry (now referred to as the MoEF&CC) began discussions to revise pollution standards for TPPs. This was prompted by the fact that while the capacity of the TPPs had more than doubled since 2003, their pollution norms remained very weak. Other than for SPM, standards were not enforced for any other pollutants. It took close to two years of consultations and negotiations, before the industry reluctantly agreed to meet new pollution standards. The MoEF&CC notified the standards in December 2015, and gave coal TPPs two years to meet these standards, i.e., till December 2017.

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The standards are ambitious, yet practical, as older plants have lenient standards compared to the newer and upcoming plants. When, and if implemented, these standards would reduce freshwater use of the coal power sector by 85%, SPM emissions by 50%, SO2 emissions by over 85%, and NOx by almost 70%. When compared to other major coal power producing countries, these standards are lenient. China, for instance, has far more stringent standards than those notified by the MoEF&CC. Yet, the Indian TPPs refused to meet these standards. Once standards were announced, they drummed up one excuse after another to scuttle implementation. What’s more, the ministry of power (MoP) and the CEA chose to become the mouthpieces of the industry, and supported their demand. The very first excuse that the industry made was that the implementation of the standards would be prohibitively expensive. In 2016, the Association of Power Producers quoted a capital expenditure of Rs 1.25-1.5 crore/MW, or a total investment of about Rs 1.5-2 lakh crore, to implement the standards. They said this would increase tariffs by up to Rs 1 per unit. The latest estimates indicate that the capex required will be about Rs 50,000 crore, and the tariff increase would be around 30 paisa per unit, or about 5% over a time horizon of two-three years. This increase is nominal when compared with the fact that the average tariff for electricity has gone up by 8% annually over the last five years. Read More…

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