Across India, a total of 115 coal-fired power units of about 20 GW capacity are either “not interested” in installing sulphur dioxide (SO2) control systems or do not have “space” for these, according to the Union power ministry. With the SO2 emission limits set to kick in from December 7, the ministry is of the view that more than 80 per cent of these units should be allowed to operate as “flexible” units “to meet the balancing or peaking requirement of consumer” as shutting them down would cause a “debt and equity erosion” of more than Rs 20,000 crore.
On June 30, then power secretary P K Pujari sent environment secretary A N Jha a letter along with a report “outlining the plan of action for implementation of the new norms” that were notified in 2015. Pujari stated in his letter: “Total 19,994 MW capacity is either not having space or is not interested to install FGD (flue-gas desulphurisation) systems. Out of this, 3,205 MW capacity has stated that it is already complying with the new SO2 norms. However, it is considered unlikely. Therefore, SPCBs (State Pollution Control Boards) may check their emission to verify their claims.” The FGD system removes SO2 from exhaust flue gases of coal-fired plants.
Leaving the 14 units of 3,205 MW to the SPCBs, the ministry put its focus on the remaining 101 units of 16,789 MW capacity. “If 16,789 MW capacity is replaced with new super-critical units, investment of around Rs 1.01 lakh crore would be required assuming Rs 6 crore/MW of cost for construction of the new power plants,” Pujari said in his letter. The ministry also did certain calculations, which led it to the conclusion that “Rs 20,969 crore” of total debt and equity would be eroded if these 101 units are “phased out immediately”, he added.
Most of the 101 units belong to state power generation companies such as West Bengal Power Development Corporation Ltd (WBPDCL), Tamil Nadu Electricity Board (TNEB), Karnataka Power Corporation Ltd (KPCL), Chhattisgarh State Power Generation Company Ltd (CSPGCL) and Andhra Pradesh Power Generation Corporation Ltd (APGENCO). According to a source privy to the development, both the ministries have met once after Pujari’s letter was sent, but there has been no decision as yet about what to do of these non-compliant units, or if the deadline of December 7 would be extended by the environment ministry.
According to the United States Environment Protection Agency (USEPA), “short-term exposures to SO2 can harm the human respiratory system and make breathing difficult. Children, the elderly, and those who suffer from asthma are particularly sensitive to effects of SO2.” Moreover, SO2 can be easily oxidised within airborne water droplets to form acid precipitation or acid rain. There were no SO2 emission norms in India before December 7, 2015.
Out of the 101 units, 36 units are less than 25-year old. Pujari stated in his letter that two issues need to be considered regarding these 36 units: “First, when environment clearance (EC) was granted to these units, there was no requirement of keeping space for FGDs. As a result, these units do not have any space. Second, investments in these units have not yet been fully recovered and they have substantial bank exposure which would certainly become NPA if these units are not allowed to operate.”
Regarding these 36 units, Pujari stated that the Central Electricity Authority (CEA), which works under the power ministry, should examine the feasibility of installation of FGD systems after site inspection. “Plants found to be having no space for installation of FGD system after inspection by CEA may be allowed to complete their operating life of 25 years. However, the inefficient units having heat rate higher than a certain specified limit — which may be decided in consultation with the CEA later — may not be allowed to operate due to higher coal consumption as well as higher CO2 and other emissions,” Pujari suggested.
However, he added that out of these 36 units, the ones that are not meeting the “efficiency norms will be allowed for limited numbers of hours in a year” to meet “the balancing or peaking requirement of grid”. While 36 units are less than 25-year old, 65 units are more than 25-year old. For these units too, Pujari has suggested that they might be “allowed to operate for a limited number of hours in order to meet the balancing or peaking requirement of grid”.In his letter, Pujari has also talked about a “cap and trade program for non-compliant units”. Under this programme, non-compliant units would be able to purchase compliance certificates from the units that are over-achieving their compliance. For example, if a 210 MW unit that was established before December 31, 2016, is emitting only 100 mg/Nm3 (milligrams per cubic metre) of SO2, it will be permitted to trade its remaining emission limit of 500 mg/Nm3 with a non-compliant plant. The 2015 emission norms stated that any coal-based unit, which has been installed before December 31, 2016, and has a capacity of less than 500 MW, would be allowed to have SO2 emissions up to 600 mg/Nm3.
As on December 31, 2016, the total installed capacity in the country is 310 GW, out of which, thermal capacity is 215.1 GW. About 87 per cent of this thermal capacity comes from coal-based power plants. On December 7, 2015, the Union environment ministry notified the new emission norms, asking all existing coal based power plants to comply with them within two years. It also made it clear that the emission norms would be applicable to underconstruction coal-based power plants from January 1, 2017.
There were no SO2 emission norms before December 7, 2015. However, from December 2003, the environment ministry started granting clearance to any power plant unit, with a capacity of more than 500 MW, on the condition that it will keep the space for FGD installation. The 2015 norms stated that if any coal-based unit was installed before December 31, 2016, and if it has a capacity of more than 500 MW, it is permitted to have SO2 emissions up to 200 mg/Nm3 only. The 2015 norms stated that any coal-based unit established after January 1, 2017would not have more than 100 mg/Nm3 of SO2 emissions.