Grappling with financial squeeze and scouting for measures to minimise pollution from their operations, coal-fired thermal power plants are caught between a rock and a hard place on the emissions front.
Facing the government's 2022 deadline for installing flue gas de-sulphurisation (FGD) systems, the plants face the prospect of shutting down if the deadline is not extended.
The FGD systems — which removes sulphur dioxide from exhaust flue gases — will be a drain on the finances of companies, who are also facing the indifferent attitude of lenders.
The initial deadline for compliance was December 2017. The deadline was extended to December 2022 by the Supreme Court. This time extension was necessitated because even government-owned plants had not placed orders for FGDs.
The apex court recently refused to allow a blanket extension of deadlines for FGD installation to power plants undergoing the corporate insolvency process.
According to the Central Electricity Authority's report on FGDs, out of the 441 TPP units which are mandated to install FGDs, only four have installed them. Also, only 100 thermal power plants, including 73 government-owned plants, have ordered FGD equipment.
Going by the progress made on this front, it is estimated that more than 340 thermal power plants won’t be able to meet the 2022 deadline.
Speaking on this issue, Power Minister RK Singh told The Indian Express in an interview that an extension is necessary, although he added that the final decision on this matter would be taken by the Ministry of Environment, Forests and Climate Change and, in specific cases, the Supreme Court.
So, how can the coal-based power plants tackle the FGD conundrum?
"Over 160 GW of coal-based plants will need to undergo fitting of FGD equipment, which translates to Rs 105,000 crore of capex required as per our estimates. This is substantial and the coal plants will look to address this by sequencing and prioritising. So, new and upcoming plants will be addressed first and then older ones. Given many of the coal power plants are in private sector, it will also depend on their credit rating and financing availability. Overall, complying with environmental norms will also have implication on tariff with average tariffs increasing by around 30 paise/ kwh," said Manas Majumdar, Partner – Oil & Gas and Chemicals, KPMG in India.
Majumdar said the government can look to help the power plants by clarifying the regulations around tariff pass-through, extension on usable life of old plants for retro-fitting and allowing for extension of timelines by one-to-two 2 years for compliance for those plants, where required, on a selective basis.
The objective behind installation of FGDs is to limit sulphur dioxide emissions from thermal power plants. But FGD units would end up producing a similar quantity of carbon dioxide and also lead to an increase in mining activity as limestone is required to run the units.
Aarti Khosla, Director, Climate Trends, feels it is hard to find a middle ground to eradicate the sulphur dioxide problem.
"For particulates, there are electrostatic precipitators, which are used commonly. For nitrogen dioxide and other nitrogen related emissions, there are catalytic converters. But the government has not formulated any policy on that. I don't know whether there is any other way other than FGD to deal with the sulphur dioxide issue, but it is also true that gypsum is a by-product obtained from it and disposing it will be another problem. So, there are genuine issues with it. Also, with COVID-19 and current economic climate, the process is further going to be delayed," she said.
With FGDs not providing a foolproof solution for pollution control, it becomes imperative for the authorities to come up with effective pollution control measures.
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