Pollution control in coal-based thermal power plants will cost money, but benefits will outweigh

How much could an Indian consumer end up paying if the coal-fired power plants install the latest technology to control toxic emissions? 

A recent study has revealed that it would cost the plant owners anywhere between Rs 730-860 billion (Rs 73,000-86,000 crore) for installing technology to control sulphur oxides, nitrogen oxides and particulate matter among other pollutants. The authors of the study explained that this investment, on average, could translate in an increase of Rs 0.6 per unit of electricity for the consumers. 

It emphasised that the investments and operational costs required for installing such devices would increase the cost of electricity generated by coal power plants by Rs 0.32-0.72 per kWh, which means an increase of 9 -21 percent. However, the authors cautioned that the cost of not abating pollution from power plants is higher and will impact millions of people across the country. 

The study, ‘India’s energy transition: The cost of meeting air pollution standards in the coal-fired electricity sector’ was done by the Global Subsidies Initiative (GSI) of the International Institute for Sustainable Development (IISD) and the Council on Energy, Environment and Water (CEEW). 

It said that renewables compare very favourably relative with coal power tariffs and “despite the question of grid stability, continued investment and subsidies for coal power is a poor choice.” “Cost of pollution-control equipment should be incorporated in the price of coal-fired power to ensure it reflects externalities,” it said. 

In December 2015, India’s Ministry of Environment, Forest and Climate Change (MoEFCC) had come out with new standards to limit the concentration of pollutants like sulphur oxides, nitrogen oxides and particulate matter from coal power plants. The ministry had set a two-year deadline, by December 2017, for the plants to comply with the standards. But the study said that by December 2017, “almost no coal plants had installed the equipment and the deadline was extended to 2022.” 

Sources in the MoEFCC admit that the initial two-year deadline was not exactly achievable but the five-year extension given is also a long rope. But that was not the only reason. “There was a huge pressure from industry and regular discussions from the power ministry as well over this which led to the extension of the deadline,” sources said.

For thermal plants located in proximity to the Delhi-National Capital Region (NCR), the target date for environmental compliance is the end of 2019. 

In the past few years, the severe levels of air pollution in Delhi-NCR region, especially during the winter season, have led to a lot of pressure on the central government and courts to take steps to ensure stricter rules to control pollution. The past few years saw a series of court orders and the formation of several expert committees both by the Supreme Court of India and the National Green Tribunal to control pollution. 

For instance, the courts passed orders to stop stubble burning in India’s northern states, control pollution from old vehicles or control pollution from the construction sector. The intense pressure from the public, judiciary and media finally led to the MoEFCC coming out with a National Clean Air Programme (NCAP) in January 2019 that aimed at a 20-30 percent reduction of particulate matter (PM) concentration over the next five years. But the move was severely criticised as the target under NCAP was not legally binding and the programme lacked teeth to ensure compliance. 

Read more: India’s plan to breathe easy is out, but targets are not legally binding 

Vibhuti Garg, a senior energy economist at GSI, stressed that “society is bearing the costs of ongoing air pollution, while thermal power producers delay the cost of retrofitting the necessary equipment.” 

“These costs include the cost of treating the health impacts of pollution, as well as the consequences on productivity of illness and premature deaths. There are non-health related costs too —air pollution corrodes infrastructure of all forms, impacts agricultural productivity, degrades waterways and reduced in-bound tourism,” said Garg in a statement. 

“Our analysis had indicated that health benefits from compliance outweigh the investment costs substantially. The additional tariff estimated in the case of plants needing retrofits is 9-24 percent more. The shock to the consumer can be regulated if the government fronts the initial capital investments and there was some talk of viability gap funding. At present, the main issue seems to be procedural delays and lack of proactive action from industry,” Shweta Srinivasan, research scientist and domain lead (climate and environment policy) at Center for Study of Science, Technology and Policy (CSTEP), told Mongabay-India. 

The study noted that coal plants in India emit harmful gases and particulate matter into the atmosphere which penetrate deep into the lungs, affecting respiratory and vascular systems. 

A recent air pollution study by CSTEP had suggested that non-compliance with emission norms would result in 300,000-320,000 premature deaths and 51 million hospital admission cases due to respiratory disorders between now and 2030. 

Karthik Ganesan, a research fellow at CEEW and a co-author of the report, stated that given the rising air pollution problem and its damaging and permanent impact on health, the government should have a zero-tolerance policy and impose strict penalties for power plants not adhering to emission standards.

“The best way to check whether emissions reduction is actually happening in power plants is by making the data of the continuous emissions monitoring devices available to electricity regulators and pollution control boards so that it can be verified whether they actually meet the standards or not. I am also of the view that the data should also be made available to the public because ultimately it is people who will pay the increased bills due to the installation of these devices,” Ganesan told Mongabay-India. 

He explained that it is necessary because this would ensure that tariff increases are passed on to the public only after sufficient scrutiny and ensuring standards have indeed been met. 

“Our estimates suggest that the electricity tariff of consumers, on average, will increase by around Rs 0.6 per unit. The exact amount would depend on the plant and region the consumer is in – for some it could be even one rupee per unit while for some it could be less than Rs 0.6,” said Ganesan. 

Will coal power plants comply with strict standards by 2022?

The study observed that “most experts are of the view that the deadline will still see many plants not complying with the new standards” and to avoid this situation the union power ministry must take a “stricter position which precludes all non-compliant plants from generating, unless they exhibit a clear retirement or phase-out plan or have made material progress in awarding tenders and beginning the construction process.” 

“Many of the existing plants will be able to meet NOx [nitrous oxides] emission standard compliance by 2022. Given that 42 percent of non-compliant power plants have not even issued notifications inviting tenders, some plants are likely to miss the 2022 deadline for SO2 compliance,” it said.

“We need to ensure that there are punitive measures in place for those who don’t follow these standards. There is no action specified right now in rules as to what would happen against those power plants that do not follow these standards,” said Ganesan.

In the Delhi-NCR region, the study said “flue gas desulphurisation has been planned for 12.7 gigawatts (GW) of thermal capacity, out of which it has been installed for only 1.3 GW capacity as of March 2019” while bids have been awarded or tenders have been issued for the remaining capacity.

At present, India’s total installed power capacity is 357,875.48 megawatts (MW) and of that 194,489.50 (54.34 percent) is coal-based.

The study advised power ministry to create a fund to independently carry out an assessment of feasibility and retrofit costs for all non-compliant plants, in order to ensure that private generators, in particular, are not able to continually play a game of cat and mouse and delay the implementation of the necessary retrofits. 

It also held that all coal power plants must be retrofitted if they are to operate in 2023 but if the cost of retrofit is proven to be far exceeding returns based on useful life and utilisation factor, then “it must be retired”.  It stressed that the government must have a zero-tolerance policy and impose strict penalties for power plants not adhering to emission standards.

“The industries are required to send the real-time data from the continuous emission monitoring devices to pollution control boards but sometimes when these polluting industries cross the allowed emission limits they tried to tamper with the data. This is a fraud. A lot more needs to be done to ensure that the strict emissions standards are complied with,” Pratima Singh, a research scientist at CSTEP, told Mongabay-India. 

“Sometimes, the chimneys of the polluting power plants are really high so the impact of pollution on population living nearby is not much but these pollutants disperse over a range … they ultimately settle down and impact the overall region. Steps are being taken by the central government to rein in polluting power plants but much more needs to be done,” said Singh.

Banner image: Coal-fired power plants are considered a major source of air pollution in India. Photo by Epagemakerwiki/Wikimedia Commons.