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Cover Story | October 2016

Costs are involved, but they ultimately benefit

Priyavrat Bhati | Programme Director - Green Rating Project, Centre for Science and Environment

What is the economic and social cost-benefit of adhering to the norms?

Economically, it involves some cost, but we have to link it to, what you have brought up, the social cost-benefit analysis. Health cost is for real. There is no that level of awareness in India, as to what the real health cost is. It includes hospitalisation cost, health cost, productivity cost, if you do not go to work etc. International studies have put the cost at US$10/15 per a tonne of carbon or more. Now, in terms of economic (or capital) cost, for the oldest plants it could be put at 0.4-0.5 crore per MW, for the newest plants it could be 0.7-0.9 crore per MW. For old plants it is lower, because they do not have to cut their emission to the lowest level. These are the rough costs for adopting these technologies. Overall for the whole country, the cost could be around Rs.80,000-1,10,000 crore for the existing capacity of coal-based power plants of about 186 GW. This will impact the power price in the range of 20 paise to 30 paise per unit for the power plant. On the cost-benefit analysis, there is no macro study done in India, but there are global studies available.

Could policy measures accelerate implementation...
I would suggest two things, basically. One is, we have to rationalise our capacities by closing down old plants of about 34,000 MW. Not all of them, but half of them which are of poor performance, poor efficiency, poor availability, poor environmental standards etc. We should incentivise states to replace them with super critical technologies or transfer their coal linkages to new players etc., such that the employment is not affected and the old plants get replaced. As old plants that essentially will retire, the new plants with higher efficiency will run at higher PLF. That will improve the health of the power sector.

The second thing is, the coal cess of Rs 400 is levied now. The power sector alone is ending up paying something like Rs 22,000-23,000 crore per annum towards this. We believe, while cess is being levied on the power sector, a portion of it could be spent on the power sector either to subsidise their loans or equity or provide some other support as that could help them to install these pollution control equipment over the next two-three years. It will give a lot of relief and offset the tariff hikes in the sector.

If all these measures are implemented in true spirit, what will be its impact on overall pollution, generally?
Estimates are that the TPPs burning coal account for about 50-60 per cent of PM and 30-40 per cent of SO2 and 40-50 per cent of NOx produced by the industrial sector. You get pollution from cars/autos and from other sources as well. Of the total industrial sector, power sector is a huge contributor to the pollution. What I am trying to say is, if you clean this sector, it will have an overall impact. And this is the trend that has happened in China and some other countries. In China, it is even tighter than ours. We don´t want to go to the extent that China has gone and then start cleaning it up. You should be pro-active.

We believe coal will remain central to India´s power needs. But we can only help it maintain its growth and maintain its acceptance in society if it is sustainable. Otherwise there will be even bigger protests and then it will be difficult to contain. Have a progressive and sustainable growth pattern as opposed to as some people would say that China increased its capacity and it is cleaning it up. We should learn from them and we don´t have to go through the same pass - first grow the capacity without any control and then control. Now china is reaching up to 5 mg/Nm3. The situation was so bad pollution has reached 30 mg/Nm3 in Beijing and some areas, and there were political protest ultimately. So, we don´t have to do that and eventually see that you need to shut down even more capacities. So it is a balancing act.

In December 2015, MoEF&CC has issued new environmental norms for Thermal Power Plants (TPPs). To what extent these norms will help address the government´s commitments at Paris Summit?
These pollution norms for TPPs were issued based only on general criteria and has nothing to do with Paris commitments of the government.

What are the current levels of emissions by TPPs and to what extent they have to be brought down to ensure that pollution levels are below reasonable limits?
Basically, the previous particulate matter (PM) emission standards are between 150-350 milligram (mg) per Nm3. The newer plants are required by the new norms to meet the standard of 50 mg/Nm3. For sulphur dioxide (SO2) and oxides of nitrogen (NOx) there were no standards. At present, the SO2 and NOx are estimated on 700-800 mg/Nm3. Lot of plants do not collect data, they go by just rule of thumb. For the new plants, these standards will result in SO2 being cut to 100 mg/Nm3, that is over 80 per cent cut. The same is the case with NOx. This is for new age plants. Based on age different plants have different levels, for e.g. from 350 mg/Nm3 to 300 mg/Nm3, it is minor. Essentially, going forward for the new age plants, the cuts could be between 80-90 per cent for main pollutants like SO2 and NOx. For particulate matter the cuts for the plants that are coming into operation now when compared to newest ones the cuts are 50 mg/Nm3 and 30 mg/Nm3. But for the older ones, the same arithmetic holds. For those emitting around 350-400 a cut to 100 means a 75 per cent reduction. The other way to look at it is the total pollution load which for NOx is 5.5-6 million tonnes and going forward, based on the generation etc., even estimating 600 billion units from the coal-based power sector, it could be around 35 per cent basically. These are essentially the cuts that could happen, based on those new standards.

What are the technical and economic limitations in adhering to the new MoEF norms for TPPs?
Technically, these technologies are matured - for PM, for SO2 and NOx. Having said that Indian coal has high ash content and it has certain specific properties. So, while the manufacturers are telling there is no problem, NTPC is running a pilot to make sure that the newest technologies like SCR (Selective Catalytic Reduction) can perform up to the benchmarks, in a pilot programme for controlling NOx. For SO2, FGD (Flue Gas Desulphurisation) is slightly matured and there is no issue on whether the standards are met or not. FGD is essentially the technology that is meant for controlling SO2 and is already being used in some imported coal based plants. As such, there are no technical limitations per se for these norms.

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