A viable financial mechanism must be evolved to remove pollutants in power plants
The effort to clean up India’s thermal power plants running on coal has never really taken off, despite the Ministry of Environment notifying emission limits for major pollutants such as suspended particulate matter, sulphur oxide, nitrogen oxide and mercury in December 2015. Considering that the cumulative impact of these pollutants on the health and well-being of people is severe, the Centre should have followed up the notification with a viable financial plan to help power plants acquire pollution control technologies. The economics favours such an approach for the larger plants, while for the smaller, older units, scaling down generation during the winter months when pollutants accumulate may prove beneficial. Originally, the compliance deadline was set for 2017, but that was missed and the plan now is to achieve the norms by 2022. Unofficial estimates prepared by one NGO, Greenpeace India, suggest the estimated cost of non-compliance by the original deadline has been about 76,000 premature deaths. Benefit-cost projections from another non-profit, the Center for Study of Science, Technology and Policy, put the positive outcomes from achieving pollution control at coal-fired plants by 2025 at potentially 3.2 lakh lives saved from premature death, and 5.2 crore respiratory hospital admissions avoided in the next decade. These are outcomes that need to be pursued seriously. It is in this context that the latest proposal from the Power Ministry to provide the equivalent of over $12 billion (about Rs. 88,000 crore), mainly to remove sulphur from coal plant emissions, becomes important.
A viable financial mechanism must be evolved to remove pollutants in existing and upcoming power plants, without losing sight of the need to stop further long-term investments in a dirty fuel such as coal that contributes to carbon emissions. Optimally, the burden of incorporating pollution control should fall on the beneficiary-user, which in simple terms would translate into a tariff hike. On the other hand, achieving speedy implementation of the new processes covering both public and private power producers may require some form of immediate governmental support, such as grants. This is particularly relevant, given that power producers that have borrowed from several institutions, including state-funded ones, are reported to be under severe financial stress. India’s coal use represents just over 54% of the present energy mix, and the fuel will continue to retain a high share of the overall generation. The challenge, therefore, is to identify the right instruments to fund the entire exercise, in the interests of pollution control and the wider social objective of extending electricity access to the unreached. There could be a positive spin-off from sulphur-removal, since it can yield commercially significant quantities of synthetic gypsum. But even if little else accrues from the effort, the benefits of clean air to public health would make the investment well worth the effort.