Burden Of Black Gold

Deepavali has come and gone and a major episodic source of pollution has blown past. We now have to confront the challenge of poor air quality for the rest of the year. As would be expected, all eyes will now turn to emissions arising from the use of fossil fuels, the most perceptible source universally. From among these, as per the Global Burden of Disease–MAPS study, coal contributes ~15 per cent of the PM 2.5 load in India. Coal-fired power generation accounts for nearly 70 per cent of total coal consumed in the economy. Though India has, for the longest period, relied on (and continues) to rely on coal for power generation, nearly 60 per cent of the coal-based generation capacity was built in the last decade. The young fleet belies the environmental stresses that originate from coal-fired power generation. There are a few reasons for this. The first is that Indian coal burns poorly and generates a significant amount of primary PM 2.5. The second is that newer and tighter emissions standards for SOX and NOX (precursors to secondary PM 2.5), though announced in 2015, are yet to be complied with, by a bulk of the power plants. The third, and most importantly, efficiency of generation is not a criterion that determines which plants are actually generating actively.

High-ash, low calorific value coal, that is predominantly mined in India, means that we are burning more coal to generate every unit of electricity. What little washing of coal that was mandated and existed was done away with in a May 2020 notification. Nearly 30 per cent of the air pollution attributable to power plants are in the form of primary particulate matter that are produced from this ash found in coal. This means, power plants have to operate more expensive and efficient particulate filtration systems to bring emissions down to compliant levels. This also results in more bottom-ash that accumulates at power plants. More than 10 billion tons of unused (unusable) ash can be found in ash-dykes and ponds next to thermal power plants. This pollutes the water and soil in the vicinity of these power plants.

Transferring more of the burden of mitigating pollution to power plants is likely to backfire. Repeated extensions to the timelines to comply with environmental norms have been given, with no clear end in sight. Facing high input costs, perennial delays in payments from crash-strapped distribution companies and an inefficient regulatory regime, power plants are loath to invest in more capital in pollution control technologies, as non-recovery will only deepen financial woes. This is a case of a few key actors— industry, regulators and the elected executive, keeping private costs at bay and instead society bearing health costs that are an order of magnitude higher. Coal is an integral part of the medium-term and its environmental footprint has to be reined in.

The solution to the impasse lies in lowering the cost of power generated in the economy, thereby freeing-up financial room to prioritise environmental performance of power plants in a cost-conscious economy. This can be achieved by ensuring that we generate as much electricity from our most efficient plants. Given the surfeit of thermal capacity that India is likely to see for much of this decade, an accelerated phase-out of inefficient plants—many of which also happen to be older and polluting units, is key. Efficient power plants generating more of the electricity implies less coal is consumed overall. The cost of coal, being the major element of every unit of electricity, the savings are not trivial. It also means less pollution has to be managed—ash as well as particulate matter and gases released into the air. Retrofitting of inefficient plants can be avoided, if they are retired instead. This is indeed a rosy picture, but why are we not realising it?

One word—contracts. Many inefficient plants, despite being old, are contracted and have access to low-cost coal on account of their favourable locations. As a result, they are preferentially used to generate electricity and age is only a number for these units. Resources are also spent to periodically refurbish these units and then to recover this, they keep newer and efficient plants at bay. That we constructed many newer plants, in the last decade, beyond our need, was a planning failure. However, subsequent decisions have sustained the over-supply and stymied necessary investment in other parts of the electricity system—distribution, transmission and perhaps even renewable energy early on.

We cannot renege on contracts but in a renegotiated world we can compensate losers, from what we save—lesser spending on coal and on pollution control. The losers are plants who get decommissioned, coal mining companies and states that lose access to cheap coal or electricity. The power sector being in the concurrent list with a significant presence of Central Public Sector Undertakings and State Public Sector Undertakings, there is an opportunity for stakeholders to determine the best outcome for the country as a whole—putting citizen health over resource rent revenues. In a business as usual scenario, the pollution from power plants increases by 50 per cent, in the 2030 timeline. We cannot allow this slide as it jeopardises the very future generation we are looking to nurture.

(Views are personal)

The author is a Research Fellow at the Council on Energy, Environment and Water, an independent not-for-profit policy research institution.