new study into the cost and benefits of installing pollution control equipment in India’s thermal power plants has estimated the bill that the sector will be plastered with at ₹3.91-3.96 lakh crore till 2030.
Equipment such as flue gas desulphuriser, catalytic reducer and electrostatic precipitators alone will account for ₹2.57 lakh crore — the rest will be the spends for operations and maintenance and consumables. This is a huge opportunity for the manufacturing industry.
This estimate is almost the same as the one made earlier by the Association of Power Producers, which put the capital costs at ₹2.80 lakh crore. But the study on ‘Benefit-cost analysis of Emission Standards for coal-based thermal power plants in India’ by the Centre for Science, Technology and Policy (C-STEP), covers a greater number of plants — 263 GW of capacity till 2030.
The C-STEP estimate is also substantially higher than another estimate of the Centre for Science and Technology, which put the capital costs of pollution control equipment at ₹71,700 crore, but it covered 169 GW.
The study, however, notes that the benefits far outweigh the costs — it estimates the monetary value of the 3.2 million avoided premature deaths and respiratory hospital admissions and work-loss days at ₹9.62 lakh crore.
The emission standards for different categories of coal-fired power plants were prescribed by the Ministry of Environment and Forests in 2015 and the plants were to have them installed by December 7, 2017. But the Ministry of Power convinced the Environment Ministry that more time would be needed for the coal power plants to meet the standards, and the new deadline is 2022.
C-STEP says that to pay for the expenditure, the electricity tariffs may need to go up by 25-75 paise a kWhr. “The revision in electricity tariffs in order to meet the emission standards will be challenging to implement in many States, were power tariffs are regulated,” the study says.
It suggests that (given the huge social benefits) the government could set up a grant of ₹93,500 crore that the power producers could avail themselves of over a year.
The background to the study is the fact that regardless of the rise of renewables, coal is expected to be India’s energy mainstay for a number of years, accounting for 80 per cent of electrical generation required in 2022 and over 60 per cent in 2030.