Prayagraj Power, which runs the 1,980 MW Bara plant in Uttar Pradesh, has requested the government to postpone the deadline to install emission control equipment by 5-6 years. According to the power ministry’s action plan on environmental norms for thermal power stations, plants were expected to commence work from 2018 and implement the same before 2022.
Renascent Power, a unit of Tata Power’s private equity platform Resurgent Power Ventures Pte Ltd, had agreed to acquire of 75% stake in Bara for Rs 6,000 crore. The plant has power purchase agreement signed with Uttar Pradesh for 90% of its capacity at a levelised tariff of Rs 3.02/unit. However, the approval of the acquisition encountered roadblocks as Uttar Pradesh sought discount on the price at which the plant sells electricity. Tata Power has brought up the issue with the High Court which has asked the state’s electricity regulator to look into the matter.
Tamil Nadu state-owned generating company has also sought extension of deadlines to install FGD system in two 600 MW units at its North Chennai power plant.
After the failure to meet the two-year deadline set in December 2015 for compliance with new emission norms, power plants have been directed by the Central Pollution Control Board to meet the revised norms by 2022.
The revised plan envisages installation of flue gas de-sulphurisation (FGD) units for 1,61,402 MW generation capacity and upgrade of electrostatic precipitators for 64,525 MW capacity.
According to projected figures, installation of emission-reducing equipment would necessitate a rise of Rs 0.62-0.93/unit in power tariffs — the average price at which discoms purchase power is Rs 3.6/unit. As FE reported in March, the states had 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.
Motilal Oswal Securities had earlier said the move for clean power would open up a Rs 1.3-lakh-crore opportunity for emission-control equipment providers such as BHEL, L&T and GE Power in the next three years.