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
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.