Emission control: Power plants set to miss deadline, again

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New Delhi | Published: December 16, 2019 6:08:21 AM

Among the power plants given the deadline to cut emission levels, 11 with total capacity of 12,800 MW are located in Haryana, Punjab and Uttar Pradesh.

According to the plan, another 26,330-MW power capacities are required to instal the flue gas de-sulphurisation (FGD) units in 2020, 64,268 MW in 2021 and 64,055 MW in 2022.

With the December 31 deadline for installing emission reduction equipment in coal-based power plants with combined capacity of 14,000 megawatt (MW) looming, over 90% of the capacities have yet to do so, meaning thereby that unless the Central Electricity Authority relaxes the rule, they will require to shut down by the year-end. According to the data compiled by the CEA, among the non-compliant capacities, 6,100 MW belongs to state governments, 3,300 MW to NTPC and the remaining to private companies.

Among the power plants given the deadline to cut emission levels, 11 with total capacity of 12,800 MW are located in Haryana, Punjab and Uttar Pradesh.

Their upgrade was expected to play a role in controlling the high pollution levels in the National Capital Region. However, it is learnt that CLP India’s 1,320 MW Jhajjar Power plant is the only station to have commissioned such equipment among these 11 units so far. Emails inquiring about the development on this front sent to the state-owned power generating companies have remained unanswered for over a couple of days.

According to the plan, another 26,330-MW power capacities are required to instal the flue gas de-sulphurisation (FGD) units in 2020, 64,268 MW in 2021 and 64,055 MW in 2022.

It requires an estimated Rs 27 lakh-45 lakh per MW for FSG installation, so the total cost of first phase of 14,000 MW is between Rs 3780 crore-Rs 6300 crore.

In fact, the initial two-year deadline of December 2015 for compliance with emission norms had already been missed by the industry. Coal-based power plants have been directed by the Central Pollution Control Board to meet the revised norms by 2022.

As on September 30, tenders for FGD of 99,200 MW capacity were floated and contracts awarded for another 35,200 MW.

“With pending dues of generators, stress in the sector and expectations that deadlines may be relaxed or norms tweaked, urgency to comply is missing,” said Sambitosh Mohapatra, partner, power and utilities at PwC India. “Given the outcry on high pollution levels, the government and regulatory bodies need to ensure strict compliance through a mission mode,” Mohapatra added.

The installation of FGDs necessitates a rise of Rs 0.62-0.93/unit in power tariffs. Finance is the biggest hurdle in this exercise, especially at state-owned and private plants. The sector is hardly in the best of health, with plants facing low capacity utilisation due to less-than-expected growth in demand. The state power departments would be wary of any rise in power costs with financial losses of the discoms under the UDAY scheme stood at Rs 28,369 crore at the end of FY19, up 88.6% year-on-year.

“All Private producers are committed to timelines laid out by CEA for installation of FGD, however reluctance of bankers to finance stems from expected delays in regulatory approval of tariff,” Ashok Khurana, director-general, Association of Power Producers, said

The states have sought access to the Centre-operated Power System Development Fund and the National Clean Energy Fund to meet the additional expenditure required to install FGDs. According to sources, many states had also demanded that the capital expenditure on this account should be passed on as grants and not considered as loans.

A sector representative who did not want to be identified points out that since power plants with lower generation costs get to sell their electricity first, producers that raise tariff on account of installation of FGD units would find it more difficult to sell power. Analysts estimate that about 17 gigawatt power plants will have to be decommissioned as they would not meet the emission norms within the deadline, mainly due to lack of space to accommodate the new systems.

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