Power ministry to retire 6,000-Mw thermal capacity

Costlier electricity, labour issues could pose a challenge

The Union government has started discussions with the states for closing down old and outdated thermal power plants with 6,000-Mw capacity to reduce carbon emissions.

Older than 25 years, these plants can't even go for retrofitting. The power ministry plans to retire another 15,000-Mw such capacity in a phased manner. These units are fully depreciated with almost negligible fixed cost component in tariff, helping state distribution companies source power at cheaper rates. Once these plants are shut, discoms may have to pay 50-80 paise more per unit.

"We are reaching out to states, asking them to shut down old power generating units. This is in line with the Paris Climate Change agreement. If we are moving towards energy efficiency, inefficient units need to be closed. Some of the state-owned units are beyond retrofitting and due to be retired," said a senior power ministry official.

According to a 2015 report by Central Electricity Authority (CEA), close to 4,000 Mw of state-owned power units need to be "retired" urgently. Another 4,185 Mw-capacity was being studied for its carbon footprint. The power ministry has selected 6,000 Mw plants from both these lists across Haryana, Maharashtra, Rajasthan, UP and MP. However, a decision would only be taken after discussion with the state authorities.

Meanwhile, a Delhi-based civil society group Indian Council for Enviro-Legal Action (ICELA) has moved a petition in the National Green Tribunal (NGT) to shut 34,278 Mw coal-fired capacity. It includes all central, state and private projects. The applicant has made the Ministry of Environment and Forests (MoEF) a party to the dispute. "Due to absence of any proper de-commissioning plan of thermal power plants, the old, polluting units with higher heat rate are being run by the agencies consuming much higher coal compared to any new efficient plant and polluting the environment," according to the application filed in NGT.

Of the total coal-fired capacity of 1 lakh Mw, about 28 plants of 34,280-Mw capacity are older than 25 years. Of this, 19,993-Mw capacity is state-run and the balance is under the Centre - mostly NTPC. India's total installed capacity is 300,000 Mw.

After the commitments made by the Indian government during the Paris Climate Summit, MoEF notified new standards for thermal power stations on consumption of water, particulate matter, SO2, NOx and mercury.

The state governments, however, have different worries. "The land and coal linkage can be utilised and/or transferred but labour would be a major issue. The discussion has just started and we will put forth this point," said a senior energy department official in Rajasthan government.

An official in UP said the state would propose that human resource should be a priority. "Older units produce cheaper power and retrofitted plants would be costlier, so final consumer tariff also needs to be taken into account," he said.

NTPC, which has planned retrofitting of 20,000-Mw capacity, had said that it would lead to a cost escalation of 10 per cent with power prices going up by Rs 50 lakh per megawatt.

At the same time, ICELA has submitted that shutting down old units would save coal consumption by 34 million tonne per annum (MTPA) as the new plants use less fuel. It also said that older plants consume more water and if they are shut and new units supply equivalent power, it would save 0.535 BCM water annually.