A new analysis by researchers shows that the new thermal power plant norms issued by the Union environment ministry last month, which allowed them flexibility in meeting certain criteria, could compromise India’s emission reduction goals that are part of efforts to tackle the climate crisis.
The new rules, which came into effect on March 31, give an extension of 1 to 3 years to all thermal power plants to comply with emission norms that are mandated by the government.
What makes it worse is that the penalty charged to companies for not complying with the extended deadline is even lower than the cost of complying with rules that are meant to reduce emissions, an analysis by the Centre for Science and Environment has found. This means that thermal power plants can continue to pollute by paying a lower price for not installing pollution control devices.
CSE’s analysis released on Thursday shows that while installing the equipment for pollution control will cost between ₹40-100 lakh/MW, the penalty that a 500 MW thermal power plant will have to pay to keep running without installing the equipment is only ₹5-11 lakh/MW as per the new amendment.
Similarly, the maximum penalty imposed on non-compliant thermal plants is 20 paise per unit of electricity. But the cost of retrofit of pollution control equipment to meet the new norms for these plants is estimated to be between 30 and 70 paise per unit of power generated.
“The amended notification favours operation of old inefficient coal power stations, which can continue to run on paying a penalty – this can compromise India’s climate change goals. What is worse is that the deterrence penalty charged to companies for not complying with the emission norms in the extended deadline is in fact a license to pollute,” the CSE analysis said.
A senior environment ministry official, however, said the cost of penalties will have to be borne by power companies but the cost of installing emission control devices can be passed on to the consumers. “The power ministry has already made provisions where the cost of compliance to new emission norms can be passed on to the consumer in the form of tariff but the penalty for not complying cannot be passed on, so this will be loss to the power generator. There are a limited number of suppliers of pollution control devices... [and] Covid also has caused delays. So we have tried to harmonise the process through this notification,” the senior environment ministry official said on condition of anonymity.
The environment ministry’s notification dated March 31 replaces the Environment (protection) Rules, 1986, with the Environment (protection) Amendment Rules, 2021.
It states that thermal power plants located within 10km radius of the National Capital Region (NCR) or cities with million-plus populations have to meet the emission norms by December 31, 2022. Thermal power plants within 10km radius of critically polluted areas or non-attainment cities (cities that did not meet the annual national standard for particulate matter emissions from 2011 to 2015) will have to meet the standards by December 31, 2023, it states. Thermal power plants that are not in these two categories and are not scheduled for retirement will have to meet the norms by December 31, 2024.
The environment ministry had first notified superior emission standards for thermal power plants in December 2015 for implementation by the end of 2017. Later in 2017, this deadline was delayed to 2022 due to resistance from the industry. Last year, the Union power ministry approached the environment ministry requesting that the timeline to meet air quality norms be deferred on account of pandemic-linked economic slowdown and the inability to source flue gas desulphurization (FGD) systems, which help control sulphur dioxide (SO2) emissions. The environment ministry appears to have heeded to their demand.
“The cost of non-compliance as per the new notification is miniscule compared to the cost of compliance, so why will companies comply?” asked Sunita Narain, director general, CSE.
“Looking at the past track record of penalisation and stay (through courts) ensured by the non-complying power plants as well at the structure and formulation of current proposed penalty amount per unit of generation it is very evident that firstly it wouldn’t even be enforced and secondly rather than ensuring compliance, it will support non-compliance by polluting power plants in a power surplus market, where cost of non-compliance is negligible compared to amount they are paid as fixed costs,” said Sunil Dahiya, researcher at Centre for Research on Energy and Clean Air (CREA).
Over 40% of India’s greenhouse gas emissions come from its energy sector because of heavy dependence on coal, according to India’s biennial report to the United Nations Framework Convention on Climate Change.