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Power firms worried over notification on emission norms for thermal coal plants

A draft notification issued by the Ministry of Environment and Forest (MoEF) in mid-May asking all thermal coal power plants to drastically reduce their emissions has put power companies in a spot.

The companies are worried that they would have to pump in significant investments to fully comply with the proposed rules, at a time when most of them are already dealing with stressed balance sheets.

The power companies with whom BusinessLine spoke to said that the emission norms will require them to install expensive equipments such as Electrostatic Precipitators (ESP) and Flue Gas Desulfurisation units. The biggest source of pollution from thermal coal power plants is particulate matter, which is a sum of all solid and liquid particles suspended in air. In India, the particulate emission norm for an average power plant is 150 milligram per normal cubic metre (mg/Nm3). The proposed notification has asked the power companies to reduce emissions of particulate matter to 100 mg/Nm3 for units that have been installed before December 31, 2003. For those units installed between 2004 and 2006, the emissions limit is being set to 50 mg/Nm3. For plants coming up after January 2017, the emission level is pegged at 30 mg/Nm3. The draft notification has not mentioned standards for plants set up between 2007 and 2017.

An executive with a leading power equipment maker said that about 70 per cent of the operational units across the country are of 210 MW and most belong to the 1980-2000 period.

“To refurbish old ESPs or install new ones, it will cost ₹40-50 crore a unit. For refurbishment, plants will have to be in a partial shutdown for 12 months. They may have to cut power generating capacity to 30 per cent, which will further impact sales,” said an industry executive.

Utilities controlled by State Governments could be the worst hit, as they are saddled with older technology. “Some State Government utilities may not even find it economical to run such plants. They could shutdown the plant, buy cheaper power from the market and sell it to their customers,” said an executive of a Mumbai-based power company.

Sources in the MoEF said that final notification on the emissions could be brought out as early as mid-October.

source: http://www.thehindubusinessline.com