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Editorial | October 2016

From Fifty-Fifty, to 55-55

Fifty-fifty, to us represents a difficult, or ´can go either way´ kind of choice. The age-old dilemma between industrial development and environmental protection falls in this category. The choice is particularly complex in developing countries or so-called emerging nations, where the fruits of human advancement are yet to reach many people, and the traditional vehicles for this outreach are the carbon-intensive products like power, steel, cement and alike. The governments, the industry, the lobbyists, the civil society, environmental pressure groups and NGOs, all have their point of view in every contentious issue, and almost every dispute ultimately reaches the courts. And so it somehow, in some sense, remains deadlocked at a fifty-fifty stalemate.

On this coming Gandhi Jayanti, the 2nd of October, India will ratify the Paris Accord on Climate Change, thereby pushing it further down the road towards the 55/55 landmark, which means 55 per cent of the nations who contribute 55 per cent of the carbon emissions, would have then agreed to implement its provisions. This is good news for climate-change mitigation. Substantively, as well as symbolically, achieving this 55/55 milestone is as if the quintessential dilemma between development and environment has been resolved by a majority of the nations that constitute mankind, and as if a pathway towards sustainable development has been agreed upon.

In the backdrop of climate change debates, coal-based thermal power has been naturally at the receiving end of the stick. The investors are disowning them, the bankers are avoiding them, the renewables industry is accelerating past them, the civil society is aghast at them, and the last proverbial nail in the coffin could be the regulators coming down heavily. Recently the Ministry of Environment and Forests has asked the coal-based thermal power industry to improve its environmental performance, and to this end, has tightened the emission norms in a graded manner for power plants of varied vintage. The incumbent power producers, bulk of whom are running coal-based thermal power plants, and are already in trouble due to low utilisations, are going to find it tough to implement the required changes, unless these additional costs are considered as pass through in their respective PPAs.

What is a threat for someone, many a time turns out to be an opportunity for some others. In this case also, as the TPPs will have to spend an estimated Rs 1 to 2 lakh crore (varied estimates), the high-technology capital goods industry which specialises in ¨state-of-the-art¨ lines for SOx and NOx removal, is definitely delighted at the prospect of a sudden windfall. To take a 360-degree view of this issue, while the industry itself may be viewing this as an unfriendly act, the citizens may look at this to be a step in the right direction, and in consonance with other measures being taken to continually improve vehicle emissions, etc.

Shall we say that we are ready to make the momentous migration from fifty: fifty, to 55:55?

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