Is the Modi Govt Watering Down Rules in the Thermal Power Sector to Help Corporates?

The Central government has undertaken a series of reforms in the recent past making it cost-effective for thermal power plants to use domestically-produced coal irrespective of environmental hazards.

New Delhi: Are rules governing thermal power plants in India being watered down by the Narendra Modi government to help corporates that have forayed into coal mining? The Bharatiya Janata Party (BJP)-led National Democratic Alliance (NDA) government has undertaken a series of reforms in the recent past apparently making it cost-effective for thermal power plants to use domestically-produced coal irrespective of the environmental hazards.

The reforms have been unleashed simultaneously with the Central government’s decision to open up the coal sector to private players for commercial mining. In June 2020, Prime Minister Narendra Modi launched the auction of 41 coal blocks (the number was later scaled down to 38) for commercial mining by private players. It was for the first time that the government opened up the coal blocks to private players without any end-use restrictions and the auction process so far has been aggressive with several top corporates bidding and acquiring blocks.

This historic reform in the coal sector has to be seen in the light of reforms that the Modi government has been simultaneously undertaking in the thermal power sector.

Also read: India Needs to Notice How 3 Development Projects Could Alter Goa’s Forests Forever

Sample the following series of reforms that have been undertaken this year: In April 2020, the Union power ministry came out with a policy measure to encourage usage of domestic coal in thermal plants by setting up a mechanism to help power plant owners to switch over from imported coal. In May 2020, the Modi government did away with the mandatory requirement for thermal power plants to use coal with ash content below 34%, a rule put in place by the erstwhile Congress-led United Progressive Alliance (UPA) government to restrict generation of fly ash. The need for coal washing, a procedure that helps remove contaminants and hence lessen fly ash by-production during combustion, was also done away with. Then, came the launch of the coal block auction in June. In the latest in the series of reforms, the Union Ministry of Environment, Forests and Climate Change (MoEF&CC) came out with a memorandum in November 2020 allowing thermal power plants to change the sources from which they obtain coal without having to make any change to their environmental clearances.

It no longer matters if coal procured by thermal plants is low in quality and calorific value and high in ash content and moisture. Until recently, most thermal power plants have been using imported coal (or a blend of it with domestic coal), which has lesser percentage of ash content, even though it is expensive than domestically-produced coal. Coal mined in India contains ash percent in the range of anywhere between 30% to 50% as compared to imported coal in which ash content can be less than 10%.

Nevertheless, pollution caused by fly ash and sulphurous emissions from coal combustion have been major concerns for ecology and environment in areas where thermal power plants are based in India.

There is a huge backlog of accumulated fly ash that is yet to be disposed of by thermal power plants. Incidents of overflooded fly-ash pond dyke breaches resulting in losses to lives and agriculture are reported frequently. Most plants have failed to meet the deadline of December 2017 for 100% usage of fly ash, a policy measure that had been put in place by the erstwhile UPA government. As per a recent report by the Central Electricity Authority (CEA), the quantum of fly ash utilised by thermal power plants during the first six months of financial year 2019-20 was 78.19%.

Thermal power plants have been issued penalty notices by the Central Pollution Control Board (CPCB), upon a direction of the National Green Tribunal, for missing their deadlines to utilise fly ash. But 102 of the 112 power plants have refused to pay penalties on various grounds including pending appeals against the green tribunal order in Supreme Court.

Also read: How a Plastic-Free Campaign Became Nilgiris’ Success Story

In addition, in accordance with guidelines issued by the Supreme Court and an order of the Central Pollution Control Board, all thermal power plants are required to meet new emission standards latest by December 2022. This target has to be achieved by installing Flue Gas Desulphurisation (FGD) systems to contain toxic sulphurous emissions. However, another report by the CEA highlights that so far only four units, out of a total number of 448 thermal power units across the country, have successfully commissioned FGD projects. This works out to a mere 1,740 megawatts (MW) of total installed capacity of 1,69,722 MW of thermal power in the country. It is slightly higher than 1 per cent of the total installed capacity!

The usage of domestically-produced coal in lieu of imported coal in thermal power plants is advocated on the basis of the fact that it will greatly reduce India’s import burden. As per government data India’s coal imports for the year 2019 stood at 197.84 million tons, a 12.6% increase over the previous year.

“It is at best a myth that there will be 100 per cent import substation of coal with the opening of the sector for commercial mining by private players. Many thermal power plants have been specifically designed to use a particular quality or blend of coal. Several more thermal power plants are located along India’s coast line and it is always cost effective for them to procure imported coal. There are issues surrounding transportation of coal too. For example, for a particular thermal power plant located in Tuticorin in Tamil Nadu, it will always be cost-effective to procure good quality coal from Indonesia through the sea route instead of getting lower quality coal from Mahanadi Coalfields through an inland route. In addition, during the months of May-July every year, when electricity demand peaks, Railways also fall short of wagons, owing to several exigencies, to transport supplies from mineheads to power plants. These are few of the challenges in using domestically-produced coal,” said R.K. Sachdev, former advisor (coal) to the Government of India.

According to experts, emission standards for thermal power plants which had been notified in December 2015, have been diluted too notwithstanding the fact that a few cities of the country have already topped the charts in terms of being the most polluted across the globe. In May 2019, the Central government increased emission limits of nitrogen oxides in thermal power plants from 300 to 450 milligrams per cubic meter.

“Talks are also underway to do away with the need for installing flue-gas desulphurisation systems in thermal power plants on the grounds that Indian coal is low in sulphur content. The fact that sulphate particles can result in smog and health hazards is being overlooked. There also lies the issue of water usage in thermal power plants. In June 2018, the central government also increased the limits of specific water consumption for plants commissioned from January 2017 onwards,” said Sunil Dahiya of the Centre for Research on Energy and Clean Air.

Also read: Why Renewable Energy Must Play a Greater Role in COVID-19 Economic Recovery

Unfortunately, experts also point out that the reforms have come at a time when the world is fast shifting away from fossil-fuel derived energy to renewable sources of energy. Over the past few years, the per unit cost of renewable energy has been dipping constantly as compared to the prices of coal-based energy. In an auction conducted by the public sector Solar Energy Corporation of India on November 23, two firms reportedly quoted tariffs of Rs 2 per unit of renewable energy for 200 MW and 400 MW capacities.

“The challenge lies in the availability of cheaper renewable electricity at night. By far, coal-based power happens to be the cheapest form of electricity at night. Once we have availability of renewables at the same price as that of coal and we also develop a cost-effective storage facility for renewable energy, the game will be over for fossil-fuel derived power,” said Ajay Mathur, Director-General of the Delhi-based research TERI (The Energy and Research Institute).

Ayaskant Das is a journalist and author.