The Real Mainstream: Can the thermal power sector be trusted again?

In the heydays of ‘India Shining’ in 2003, the ministry of environment and forests (MoEF) had experimented with an alternate model to control pollution from industries. The model was named ‘Corporate Responsibility for Environment Protection’, or CREP. It was based on the principle of voluntary compliance: instead of the government imposing pollution standards, industries were encouraged to voluntarily commit to a self-defined standard. Seventeen highly polluting industrial sectors, including the coal-based thermal power, submitted their commitments. Coal thermal power plants (TPPs) committed to meet suspended particulate matter (SPM) standard of 100 mg/Nm3 from 2003 onwards. They agreed to develop stringent Sulphur Dioxide (SO2) and Nitrogen Oxide (NOx) standards and meet them from 2005 onwards. They also committed to voluntarily develop standards for mercury and other toxic heavy metals by December 2003, and abide by them subsequently. The Central Electricity Authority (CEA), the key policy and planning authority for the electricity sector, was made responsible for ensuring that these commitments were met. Not surprisingly, none of these commitments was met. The MoEF forgot about CREP; the CEA overlooked its commitment and TPPs continued with business-as-usual. Fast-forward 11 years—in 2014, the ministry (now referred to as the MoEF&CC) began discussions to revise pollution standards for TPPs. This was prompted by the fact that while the capacity of the TPPs had more than doubled since 2003, their pollution norms remained very weak. Other than for SPM, standards were not enforced for any other pollutants. It took close to two years of consultations and negotiations, before the industry reluctantly agreed to meet new pollution standards. The MoEF&CC notified the standards in December 2015, and gave coal TPPs two years to meet these standards, i.e., till December 2017.

The standards are ambitious, yet practical, as older plants have lenient standards compared to the newer and upcoming plants. When, and if implemented, these standards would reduce freshwater use of the coal power sector by 85%, SPM emissions by 50%, SO2 emissions by over 85%, and NOx by almost 70%. When compared to other major coal power producing countries, these standards are lenient. China, for instance, has far more stringent standards than those notified by the MoEF&CC. Yet, the Indian TPPs refused to meet these standards. Once standards were announced, they drummed up one excuse after another to scuttle implementation. What’s more, the ministry of power (MoP) and the CEA chose to become the mouthpieces of the industry, and supported their demand. The very first excuse that the industry made was that the implementation of the standards would be prohibitively expensive. In 2016, the Association of Power Producers quoted a capital expenditure of Rs 1.25-1.5 crore/MW, or a total investment of about Rs 1.5-2 lakh crore, to implement the standards. They said this would increase tariffs by up to Rs 1 per unit. The latest estimates indicate that the capex required will be about Rs 50,000 crore, and the tariff increase would be around 30 paisa per unit, or about 5% over a time horizon of two-three years. This increase is nominal when compared with the fact that the average tariff for electricity has gone up by 8% annually over the last five years.

TPPs also raised the bogey of untested technology. They contended that NOx control technologies are not tested for high-ash Indian coal, and hence, more time is required. But this excuse was found to be inapplicable to the majority of the sector, as all existing plants have to meet the NOx emission norms of 300 mg/Nm3 or 600 mg/Nm3, which can be achieved easily using relatively low-cost solutions such as boiler optimisation, low-NOx burners and over-fire-air dampers. Importantly, these solutions have another benefit: they will also improve the efficiency of the plants. For the few plants commissioned after January 1, 2017, which have to meet the NOx norm of 100 mg/Nm3, advanced control technologies like selective non-catalytic reduction or selective catalytic reduction are needed. Industry says these technologies are untested for high-ash coal. The International Energy Agency’s Clean Coal Centre, however, disagrees. It has recently stated that high-ash coal can also utilise these NOx control technologies with ease.

Inexplicably, the CEA, too, has put forth its own excuse to first scuttle and then delay the standards. It claimed that there is no space to install flue-gas desulphurisation (FGD) technology for SO2 control in most existing plants. However, the number of plants, for which space was an issue, has kept decreasing over time. In February 2017, the CEA said about 74 gigawatts (GW) capacity did not have space for FGD. This number has come down to 3-GW capacity in the recent CEA report. This proves that space was never a real concern. Now, the CEA wants to install FGD in all plants, even in those where it is not required, and, therefore, wants more time to implement standards! The sector has also claimed that implementation of standards will lead to long shutdown times for plants, creating a power deficit in the country. Again, this is grossly exaggerated. Take the example of China. It has implemented even more stringent norms in a time frame of two years, without creating any disruption in its power supply. Technology suppliers say that many of the technologies can be installed during the annual maintenance shutdowns. For others, the shutdown period would be a month or two.

The cumulative result of all these excuses was that by December 2017, a vast majority of plants had not even started preliminary work for implementing the standards. Few months before the deadline, the MoP and the CEA started putting pressure on the MoEF&CC to extend the deadline. The MoP demanded six-seven more years to implement the standards. After ‘hectic’ negotiations, the MoEF&CC extended the deadline by five years. Most TPPs have now been asked to meet the standards by 2021 and 2022. There is no merit in extending the deadline by five years. There is even less merit in the assumption that TPPs will meet these standards by 2022. For the past 15 years, they have not met any commitments. Come 2022, there are good reasons to believe that they would again renege and demand more time to meet the standards. How do we prevent this?

In most developed countries, setting of standards is followed by a detailed compliance schedule that lists when a plant will meet certain milestones. This allows regular monitoring and reporting and, thus, keeps the pressure on the industry to comply. The MoEF&CC will have to work with Pollution Control Boards (PCBs) to develop similar milestones for each TPP. But this alone will not work. To ensure these standards are met, and before time, the MoEF&CC should also levy financial penalties for non-compliance. After December 2017, most plants have been defaulting on standards. Such gross non-compliance should not go unpunished. Under Section 15 of the Environment Protection Act, a maximum of Rs 1 lakh can be fined for every non-compliance. As plants are non-complying on multiple parameters, for each day of non-compliance, Rs 1 lakh per parameter should be imposed. This will achieve two things. One, it will put pressure on TPPs to meet standards as soon as possible since this penalty will add up to about 10-20% of the cost of pollution control. Two, it will improve oversight as pollution control boards will regularly check plants to calculate penalty. The money collected could be used to add more muscle to the PCBs, which have lost a major source of their income because of GST.

The coal-based thermal power sector is the biggest source of industrial pollution in India: it accounts for 60% of SPM emissions, 50% of SO2, 30% of NOx, 80% of mercury emissions, and 70% of freshwater withdrawal—of all industrial sectors. The 2015 standard, therefore, is the biggest pollution control action taken by the government in decades. Rather than pandering to the whims of the industry, it is time the MoEF&CC and the PCBs do their job and enforce these standards