Stricter Norms A Costly Affair for Power Players

Published: 19th February 2016 06:04 AM  |   Last Updated: 19th February 2016 06:04 AM   |  A+A-

BHUBANESWAR: As revised emission standards for coal-based thermal power plants will upset the economics of infrastructure projects, power plant developers in the State have sought relaxation from the stringent emission norms of the Centre.

The revised norms notified by the Ministry of Environment, Forest and Climate Change (MoEF) in December last year have made the pollution standards more stringent for new projects as well as old plants.

While power producers are still in the process to figure out the cost involved to make their plants compliant to the new emission norms, sources in the energy sector said the capital cost of a project will increase by Rs 80-90 lakh per mega watt.

“Besides, retrofitting old plants with new technology to minimise pollution involves capital cost. The project developers have to pass on the additional cost to consumers, thereby increasing the cost of power,” said a senior executive of an MoU signed independent power project (IPP).

Price.JPGAccording to a conservative estimate, power generation cost will increase by at least 20 paise per unit. This will have a cascading effect and consumers will have to shell out an additional 50 paise per unit of electricity.

The State-owned OPGC is adding capacity of two super critical units of 660 MW each to its existing capacity of 420 (2X210) MW plant at a projected cost of Rs 11,547 crore funded at a debt equity ratio of 75:25.

Taking the additional cost into account, OPGC may require another Rs 600 crore for its expansion plans, sources in the company said.

“Arranging additional fund to the tune of Rs 600 crore during execution of the project is an impossible task. Besides, the plant needs to be redesigned to adopt the new technology. This in effect will further delay the project with huge financial implication,” the sources said.

The emission norms will equally hit power projects which have been commissioned. The MoEF has categorised the thermal power plants into three groups, those installed before December 31, 2003, installed after 2003 up to December 31, 2016 and to be installed after December, 2016.

Of the 28 MoU signed IPPs, Sterlite Energy, and GMR Kamalanga have fully commissioned their plants while Jindal India Thermal Power Limited (JITPL) and Ind-Barath Energy Ltd have commissioned one unit. Several other IPPs are in advanced stage of commissioning.

The new standards are aimed at reducing emission of particulate matter, sulphur dioxide and oxide of nitrogen, which in turn will help in bringing about an improvement in the ambient air quality (AAQ) in and around thermal power plants.

The Ministry has also fixed water consumption parameters for all existing and new plants, making it mandatory to use water more efficiently.


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