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With most thermal plants likely to miss clean energy deadline, PowerMin recommends breather up to 2 yrs

Out of a total of 448 units that are planned for flue-gas desulfurization (FGD) systems — which remove SO2 from exhaust flue gases — the ministry is recommending 322 with a capacity worth one lakh megawatt (MW) for an extension.

Written by Prabha Raghavan | New Delhi | August 20, 2020 3:12:06 am
Rajiv Gandhi Thermal Power Plant at Khedar (Haryana Power Generation Corporation Ltd) in Hisar, Haryana. (Express file)

With several thermal power plants likely to miss the government’s 2022 deadline for installing equipment to minimise pollution from their operations, the Ministry of Power is recommending that the deadline be extended by up to two years for over 300 such units. The recommendation was made last week in a letter to the Ministry of Environment, Forests and Climate Change (MoEF), said Power Minister RK Singh.

“I believe it (the extension) is necessary,” the minister told The Indian Express in an interview, adding that the final decision on this matter would be taken by MoEF and, in specific cases, the Supreme Court.

Out of a total of 448 units that are planned for flue-gas desulfurization (FGD) systems — which remove SO2 from exhaust flue gases — the ministry is recommending 322 with a capacity worth one lakh megawatt (MW) for an extension, according to the minister. The ministry is “not touching” cases pending at the Supreme Court and instances where the Central Pollution Control Board has imposed penalties.

“We are not recommending two years for everybody. There are some cases where we are not recommending (an extension) where they are already in progress,” he said.

“All told, the different categories will require different timelines for extension. There are some categories where the bid, etc, has already happened…and the work had started before (Covid-19) hit us. So they will require less extension,” he added.

The process of commissioning FGD for thermal capacity has been conducted in a “phased” manner that consists of a feasibility study, following which tender specifications are made and Notices Inviting Tenders (NIT) are issued. Bids are awarded based on this, following which the FGD is commissioned.

Of the 448 units comprising nearly 1.70 lakh MW capacity, feasibility studies were yet to start in around 10 units consisting of 3,560 MW as on August 11. Of the remaining 438, feasibility studies had been conducted on around 416 units (1.57 lakh MW), tender specifications made for 329 (1.31 lakh MW), NITs issued for 294 (1.20 lakh MW) and bids awarded for 130 units (58,000 MW). FGD has been commissioned for four of these units (1,740 MW).

India’s green push has been blunted somewhat due to the feeble progress in addressing the environmental damage on account of the country’s massive fleet of aging and inefficient coal- and lignite-fuelled thermal power plants, most of which are highly polluting in terms of carbon dioxide and sulphur dioxide emissions. This move to push the deadline comes at a time when newer, cost-efficient and lesser polluting supercritical thermal plants are struggling to get customers or coal, while the inefficient, highly polluting and aging plants continue to sell costly power under the protection of long-term power purchase agreements (PPAs) to discoms.

In June 2017, the Power Ministry had informed the Environment Ministry that 165.9 gigawatts (GW) out of the total of 187.1 GW — or 89 per cent of the country’s existing coal-based power capacity — were not in compliance with the sulphur dioxide (SO2) emission limits notified in 2015.

Even though the 2015 norms stated all existing coal-based plants need to follow emission limits by December 7, 2017, the ministry stated it would take “seven years” to “retro-fit” FGD systems in the existing capacity. It had also stated that the remaining 19.9 GW of the aforementioned 165.9 GW capacity either does not have “space” or is “not interested” in installing FGD systems. A plan regarding installation of FGD systems in the plants under construction was “yet to be decided”, it had said.

While progress in getting thermal plants to install FGD systems, including drawing up the scheme, holding bids and placing work orders, happened after 2017 “in a large number of cases”, several thermal units have been facing challenges, according to the minister.

This includes uncertainty over tariff enhancement due to the additional investment required to install these units, due to which banks have shown reluctance to finance the exercise.

“One major issue is that of financing. The banks were reluctant to finance…because they said that there has to be a visibility of enhanced tariff on account of the additional investment which is being made, which is almost Rs 55 lakh per megawatt,” said Singh.

Another issue relates to the government’s Make in India push and the ensuing requirement for a large proportion of value addition in capacity to be domestically sourced.

“Right now, we have mandated that 80 percent has to be at least value addition here, in India. A lot of that capacity is there, some capacity is being added,” he said.

“The Covid-19 lockdown is another major factor…that is about a minimum of six months in which that much extension is necessary,” he added.

Paradoxically, while being inefficient, the old coal/lignite thermal power plants are also operationally inflexible and not capable of quickly changing their output (ramping up or down) in tandem with the RE generations giving varying output each time of the day.

Modern supercritical power plants are capable of flexing their generation, and are indispensable for integrating large-scale RE, as India has limited gas power plants and just a few pump storage hydroelectric plants required to support the variable nature of RE generation.

According to Centre for Research on Energy and Clean Air (CREA) data, only 1 percent of the total coal-fired power plant capacity required to comply with the emission standards under the current phasing plan have installed the mandatory FGD systems. Of the total coal-fired capacity in the country, plants with only 27% capacity have awarded bids for FGD implementation. Around 72% capacity have not even awarded the bids, according to the data.

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