Economy

Power producers seek more time to cap toxic emissions

Bloomberg June 9 | Updated on June 09, 2020

Power producers have sought another extension for capping toxic emissions from their plants, citing lack of bank funding and disruptions caused by the coronavirus pandemic, people with knowledge of the matter said.

The Association of Power Producers has written to Power Minister RK Singh, seeking a minimum two-year extension for installing equipment to control emissions, such as sulfur di-oxide, the people said, asking not to be identified as the discussions aren’t public. This is second waiver sought by the producers who have to carry out the procedure in phases until the 2022 deadline.

The plea for a delay reflects the concern that the slump in consumption may not recover quickly. Most of India’s coal-fired power producers have struggled to install the equipment, citing lack of funds. A nationwide lockdown to control the spread of the coronavirus has reduced demand for electricity and resulted in a cash squeeze at the generators, further eroding their creditworthiness.

The lobby group, which counts Adani Power Ltd. and JSW Energy Ltd. among its members, said while order placements will be disrupted because of the pandemic, the bigger challenge was lack of funding, according to the people. Banks are also wary of funding the equipment, the people said. The group demanded the power regulator should issue a provisional tariff order for compensating the costs.

State-run generator NTPC Ltd has ordered equipment but it has also missed the 2019 deadline for its plants at the outskirts of the national capital.

Meanwhile, the group asked the government should approach the top court to seek an extension, so that plants don’t end up violating the government order, the people said citing the letter. The installations are being done under the watch of the Supreme Court.

Ashok Khurana, Director-General at Association of Power Producers, declined to comment on the letter, while the Power Ministry didn’t immediately respond to an e-mailed request for comment.

The Environment Ministry introduced the guidelines in December 2015 for capping use of water and emissions of particulate matter, sulfur di-oxide, oxides of nitrogen, mercury at power plants. The Ministry gave the producers two years to meet the norms, a deadline they said was too short. The deadline was later extended for a phase-wise implementation going up to 2022.

The Ministry’s guidelines meant to contain the worsening air pollution in cities that posed threat to human life.

Published on June 09, 2020

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