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The government has once again extended the deadline for coal-fired power plants to lower their sulphur dioxide emissions.
In an order on April 1, the Ministry of Environment, Forests, and Climate Change had pushed the deadline for thermal electricity generators to install flue gas desulphurisation technology by up to three years.
The Ministry had first set December 2017 as the deadline for the plants to meet SO2 emission standards, but within a few months had extended it by varying timeframes for different plants, depending on the population density and the pollution levels in their areas. The latest deadline was December 2022.
The new order pushes the deadline to December 2024 for plants that are not located in densely-populated or heavily-polluted areas. Moreover, plants due to retire soon have been given time till December 2025 even if they are situated in heavily-polluted areas.
Most of the plants nearing retirement are owned by State governments, which would prefer to shut them down rather than invest in the desulphurisation technology, but have been constrained by the politically disadvantageous prospect of laying off the plant workers, said a senior official from the Ministry of Power.
“A different deadline for the plants close to retirement gives the State governments sufficient time to re-deploy personnel elsewhere,” the official said.
Rise in tariffs
The installation of the desulphurisation technology, estimated to cost at least $10 billion on a national scale, will lead to a rise in tariffs that the plants charge from electricity distribution utilities, the official conceded.
The Ministry of Power, however, will now delay the enforcement of merit order dispatch, the regime for the Discoms to buy electricity from the cheapest source. This will be done to protect the plants that install the technology early on and raise their tariffs, the official said.
“Now we will extend it from December 2022 to December 2024. Merit order dispatch will kick in when all the plants become FGD-compliant,” the official said.
Under the April 1 order, plants due to retire by the deadline for their specific category have the option of not installing the technology and still continue operations even after retirement as long as they pay a penalty of 20 paise per kwh of electricity generated. Varying penalty rates will similarly be charged from plants that fail to meet their deadline.
The classification of plants under different categories will be done by a task force constituted by the Central Pollution Control Board (CPCB), consisting of representatives from the Ministry of Environment and Forest and Climate Change, the Ministry of Power, the Central Electricity Authority (CEA) and the CPCB.
“This exercise of location-based categorisation in terms of existing pollution level has already been done by the CEA, so we can easily categorise the plants now,” the official said.
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