New environmental norms for coal-based power plants could have a bearing on your electricity bill.
The Power Ministry has written to the Central Electricity Regulatory Commission (CERC) asking for thermal power plants to be allowed to pass on to consumers the cost of complying with the revised environmental standards.
Earlier this year, Power Minister RK Singh had told the Rajya Sabha that the retrofitting of old thermal plants is likely to increase their tariff by 62-93 paise a unit.
As many as 295 coal-based power plants were given a timeline of 2-4 years to meet the strict environmental norms, which were to be implemented by December 2017. These plants now have time till 2022.
A November 2017 statement from the India Energy Forum said the cost of retrofitting a power plant ranges from ?1 crore to ?2 crore per MW, while that for a new coal-based plant would be around ?5 crore per MW.
A retrofitting will involve installation of equipment for flue-gas desulfurisation and conversion of open cycle to close cycle. This will increase the cost of operation and maintenance of thermal plants, particularly those older than 25 years.
“In view of the nature of the cost involved in the implementation of the revised standards of emission and the provisions of Power Purchase Agreement, there is a need to develop the appropriate regulatory framework specifying the mechanism or enabling guidelines for providing regulatory certainty to the thermal power plants about recovery of such additional costs through tariff. It is important to ensure implementation of the revised standards of emission for TPPs for controlling the pollution level in larger public interest,” says the Power Ministry’s letter, dated May 30.
Industry watchers see the move as a positive for major thermal power producers, such as the NTPC, that were apprehensive of the environmental-compliance cost hitting their bottomline.
In December 2016, then Minister of State (Independent Charge) for Power and Renewable Energy, Piyush Goyal, had said: “The NTPC board has taken an in-principle decision...to replace its 25-year-old 11,000 MW power plants in the next five years.”