Environment

Thermal Power Plants Get Environment Clearance Extension Sans Substantial Progress

The extension of the clearance sets a dangerous precedent at a time when environmental concerns should be a top priority.

In the past year, two thermal power projects, have been recommended for an extension of their environment clearance, by an expert panel of the environment ministry even when there has been no substantial progress in the projects – a requirement that is a must for securing such extension. Both projects are owned by companies that are subsidiaries of Adani Power Limited, India’s largest thermal power producer.

Of the two thermal power projects, one is the 2,640 megawatt (MW) imported coal-based thermal power plant at Dahej, Gujarat. In 2011, when the project had first got clearance its estimated cost was about Rs. 147 billion (Rs. 14,706 crore). The second is the 1,320 MW imported coal-based supercritical thermal power plant in Anuppur in Madhya Pradesh.

Adani Power Ltd. has a total power generation capacity of 12,450 MW comprising thermal power plants across several states like Gujarat, Maharashtra, Karnataka, Rajasthan, and Chhattisgarh.

In the case of the Dahej project, initially, the environmental clearance (EC) was valid for five years (till October 24, 2016). But less than 50 days before the expiry of the validity, in September 2016, the Ministry of Environment, Forest and Climate Change (MoEFCC) amended the Environmental Impact Assessment (EIA) notification 2006, which governs the environment clearance rules, and as a result, the five year validity for the project automatically became seven years.

With the amendment as per the September 2016 notification, the validity can be further extended by a maximum period of three years, making the maximum validity of an environment clearance as 10 years, beyond which it cannot be extended. Additionally, the extension is only given in cases where substantial physical progress has been achieved by a project.

Despite the maximum extension period set at three years, last year, in 2018, the Adani Power Dahej Ltd. (APDL) sought an extension of the EC by five years. The request was considered by the Environment Assessment Committee (EAC) on thermal power projects in its meetings in July 2018, August 2018 and September 2018. The project had first sought five years extension of EC, in July 2018, but the decision on it was deferred by EAC to its August 2018 meeting.

The expert panel, in the August 2018 meeting, then noted that extension to EC can be given only for three years and the progress in the project has been “bare minimum” till that time.

“As per the provisions of the EIA Notification, only three years can be extended beyond seven years whereas PP sought an extension of five years. Further, the committee noted that the extension of three years is to be given only in case of a project which has achieved substantial physical progress so that the extension will enable them to complete balance works,” the panel had noted.

Dahej, Gujarat. Map from Google Maps.

It had also noted that “from the photographs submitted by PP, only buildings are visible” and the “project has not achieved any significant progress in terms of construction activities of the BTG (Boiler, Turbine, Generator) and BOP (Balance of Plant).”

However, by the September 2018 meeting, ADPL submitted documents to the EAC and scaled-down its requirements for EC’s extension to three years, promising to finish work within that time. Despite raising objections that the project had not achieved substantial progress – a criterion required for extension of EC – the EAC recommended an extension.

However, the EAC in its September 2018 meeting, noted that the company “will start construction only after signing Power Purchase Agreement (PPA)” and that “the date of signing of PPA is not certain.”

“The project timelines had already been reduced from five years to three years. Further, the three years timeline may be reduced to two or two and a half years, if the PPA is not signed which will lead to non-completion of the project by October 2021,” noted the minutes of the EAC’s September 2018 meeting.

Subsequently, the MoEFCC in March 2019, guided by the EAC’s recommendation, granted a three-year extension of validity of EC (till October 2021) to the ADPL project.

Kanchi Kohli, who is an environmentalist and senior researcher with the Centre for Policy Research (CPR), said in such cases project proponents should be held accountable rather than being rewarded with extensions.

“Such extensions give the impression that once environmental clearances are granted they can be indefinitely postponed only based on clarifications of project proponents who have defaulted. Even though projects don’t get built, they alter the lives of communities who are dependent on land and water earmarked for projects. This is often also a loss of productive livelihoods. Such poor planning should be a reason to cancel clearances and hold project proponents accountable rather than awarding them with extensions,” Kohli told Mongabay-India.

Another project gets three-year extension despite not making substantial progress

Similar to the Dahej project is the case of the 1,320 MW imported coal-based supercritical thermal power plant in Anuppur in Madhya Pradesh.

The Anuppur Thermal Energy Private Ltd. submitted the online application on October 10, 2019, seeking an extension of validity of the EC for a period of three years (till Nov 26, 2022). The environment clearance given to the project in November 2012 was earlier valid for five years but was automatically extended for seven years after the EIA notification was amended by the MoEFCC in September 2016.

In 2012, the cost of the project was estimated at Rs 72 billion (Rs 7,273.65 crore).

Adani Power Company's plant at Mundra in Gujarat. Credit: Reuters

Adani Power Company’s plant at Mundra in Gujarat. Photo: Reuters

The project was considered in the EAC’s meeting on October 21, 2019. Anuppur Thermal Energy (MP) Private Ltd. (ATEMPL), which is the subsidiary of Adani Power Ltd., made a presentation before the expert panel and said that the construction of the thermal power plant could not be started in the absence of “the PPA and financial closure”.

Blaming the government, the company also said that “prevailing policies of the Government of India have prevented ATEMPL from obtaining coal for the project due to which the plant could not be set up till date.”

“Company would like to implement this project, once the PPA is signed and the financial closure achieved. PPA could not be tied up for sale of Power which is one of the main reasons why construction activities of the power plant has not been initiated,” the company told the panel.

It further contended that given “ATEMPL’s favourable location”, close to likely coal sources “as well as parent company Adani Power Limited’s competitive expertise, ATEMPL stands a fair chance” of being successful in the development of the plant at the said site.

The EAC, as per the minutes of the meeting, noted that “only land acquisition has been completed and a boundary wall has been constructed” and “there has not been significant progress in the last seven years.”

“However, project proponent gave PERT chart (Programme Evaluation Review Technique) stating that power plant will be commissioned within 33 months from zero date. Further, the start of zero date is not known at present. It will be decided only after obtaining PPA,” the EAC observed. The PERT chart is a project management tool which gives details about the timelines of a project.

Despite not meeting the criteria, the EAC recommended the Anuppur project for extension of validity of EC for further period of three years till November 26, 2022.”

This article was originally published on Mongabay.