Why govt must incentivise power plants for reducing emissions

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Published: May 22, 2020 1:50:01 AM

A report released by CSE suggested that the government should come up with a mechanism which would incentivise the power plants that invest in upgrading their technologies to reduce emissions and formulate disincentives for the laggards.

Power plants which are taking no actions to install equipment to reduce emissions should face punitive action from the government, environment experts said.Power plants which are taking no actions to install equipment to reduce emissions should face punitive action from the government, environment experts said.

Power plants which are taking no actions to install equipment to reduce emissions should face punitive action from the government, environment experts said.

A report released by the Centre for Science and Environment (CSE) on Thursday suggested that the government should come up with a mechanism which would incentivise the power plants that invest in upgrading their technologies to reduce emissions and formulate disincentives for the laggards.

Referring to a report by the Environment Pollution (Prevention and Control) Authority, Sunita Narain, director general at CSE, said that the government can design the merit order despatch — the system which allows power plants with lower variable cost to sell power first — so that it will incentivise the plants that install pollution control equipment.

Coal-based power contributes to pollutants such as oxides of nitrogen (NOx), sulphur dioxide (SO2) and particulate matter (PM). In addition, the sector is also very water-intensive. Though Indian coal has low sulphur content, experts at CSE pointed out that due to its low calorific value, the volume of coal required is significantly high, leading to higher S02 emissions. Referring to satellite data, the report pointed that high S02 concentration are found in areas in Odisha, Jharkhand, Chhattisgarh and Maharashtra, which have large coal-fired capacities.

Coal-based power plants across the country are in the process of installing flue gas de-sulphurisation (FGD) units and electrostatic precipitators (ESP) and upgrading existing equipment to meet the environmental norms. It requires an estimated Rs 27 lakh-45 lakh per MW for FGD installation, necessitating a rise of Rs 0.62-0.93/unit in power tariffs. As reported earlier by FE, about 14,000 MW of power plants around the national capital region have missed the first deadline of installing FGDs by December, 2019. Another 26,330-MW power capacities are required to set up FGD units in 2020, 64,268 MW in 2021 and 64,055 MW in 2022. CLP India’s 1,320 MW Jhajjar power plant is currently the only station to have commissioned such equipment.

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. A section of the industry has pointed that coal washing can solve the problem of S02 emissions, and the expenses on costly FGDs need not be made.

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