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Debt-laden and deadly, India’s coal-fired power sector continues to suck out large sums and pump in toxic pollutants. Is the country heading into dark times on the pretext of seeing light? TOI analyses various reports of Central Electricity Authority, environment and power ministries 

Nagpur: Already battling an outstanding debt of Rs1.74 lakh crore and the falling price of renewables, analysis of new data reveals that almost one-fourth of the country’s thermal power plants are performing not even half as good as anticipated by the Union coal minister. Yet, another 1,320MW of coal plant has been given the go-ahead by the Union environment ministry’s member secretary and another plant of equivalent capacity awaits approval.

A close assessment of the Central Electricity Authority’s April to June reports reveals that of the country’s 165 power plants having more than 600 units, at least 45 are running at a plant load factor (PLF) less than 50%. This is far away from the declared goal of Union coal minister Piyush Goyal who, during a recent review meeting, had set a target of 100% PLF for all power plants “having sufficient coal supply”.

PLF is the actual power generation out of the total installed capacity and indicates a plant’s performance. Experts have maintained that for a plant to be technically viable, the PLF should be more than 50%.

While the average PLF of coal-based plants was 60.72% last fiscal (as per CEA), the authority’s recent data shows that at least 67 of such plants, with a monitored capacity of 71,959 megawatts (MW), are currently performing below this mark.

Moreover, of all these 165 plants, there is only one which has managed to measure up to the minister’s target — Budge Budge Thermal Power Station at Achipur in Bengal which has a PLF of 100.23%.

Even as the existing coal-fired plants are not functioning to its full potential, the country last year paved way to add a humongous 14 gigawatt (GW) of thermal projects. Despite CEA’s declaration that India doesn’t need any more coal-based power units till 2022 (draft National Electricity Plan 2017-2022 released in December 2016), the Ministry of Environment, Forest and Climate Change (MoEFCC) gave clearances to eight thermal power plants in 2017 (ministry records).

Concerns on this front continue. Latest clearance reports of the environment ministry show that a 200MW coal-fired plant, proposed to come up at Nalgonda district in Telangana, got a clearance in April this year.

Among mega projects, the second expansion (660MW X 2) of a thermal power station run by NLCIL at Cuddalore district in Tamil Nadu has been “accepted by the member secretary” and might get a clearance soon. Also, a proposal for expansion of Orissa’s Talcher Thermal power project (660MW X 2), owned by state-run power firm NTPC, too has been submitted for approval.

Under present circumstances, investing in more coal plants would create another wave of non-performing assets (NPAs), says Sunil Dahiya. The senior campaigner at Greenpeace India further explains, “The average PLF has been dwindling since the last five years. An over-capacity situation has been created due to the installation of excess plants. Building more plants is only going to increase the power tariff and debts due to the power sector.”

The distress in the power sector is evident from various reports. The 37th report of the standing committee on energy for the ministry of power, which was presented to the Lok Sabha in March this year, stated that 34 stressed power plants have an outstanding debt of Rs1.74 lakh crores.

The ‘Coal vs Renewables Finance Analysis’, published by the Centre for Financial Accountability in June this year, states that in September 2017, the power sector alone accounted for Rs11.7 lakh crore out of the total credit of Rs77.9 lakh crore.

“A large source of bad debts in the Indian banking system is the power sector. In terms of stressed loans, it accounted for 36.8% of the overall loans in India,” the report said.

The constant decline in PLF is also apparent but so is the increase in coal consumption over the years. CEA’s evaluation tells that from 77.27% in 2006-2007, the average PLF of coal plants has come down to 63.75% (April-June this year).

But the documents procured through Right to Information (RTI) by Greenpeace India disclose that the coal consumption by power plants has seen an upsurge. From 447.8 metric tonne (MT) in 2012-13, it rose to 605.9 MT in 2017-18 — a trend which is “not to be celebrated”.

Says Dahiya, “The coal consumption grew because of an increase in electricity demand post-2012, when the average PLF of the then existing plants was around 78%. Had the power generation capacity remained constant with no more plants coming up, PLF would not have fallen. The demand for electricity did not increase as much as what CEA expected.”

Even during the peak months of May and June, the PLF of many plants has not gone above 60% in the last three years indicating that there is not much rise in demand, points out environment expert Debi Goenka.

“Though there are various reasons why plants are not running to full capacity, the reality is that there isn’t enough demand for power and people are not willing to pay the price. Many plants didn’t come up despite getting an environmental clearance knowing that there won’t be many takers for the power. Banks have also realized it and now to make things more complicated, the price of renewable energy is much cheaper than coal. At such times, it would be senseless to invest in a coal plant,” adds Goenka.

Increase in domestic coal consumption is also in discord with the commitments made India in the Paris agreement to curb the country’s carbon emissions. “While many countries are phasing out fossil fuels, we are still not reducing our dependency on them and this remains a threat to climate change,” says Dahiya.

Other than this, the pollution due to coal plants — the biggest polluters of sulphur dioxide and mercury (Central Pollution Control Board data) — remains unimproved. “In total, 1,51,000 premature deaths could be avoided annually in India through targeting power sector,” says a recent report by Louisiana State University (LSU).

Regardless, 1,283.570 hectares of forest land is all set to be diverted for Amelia coal block (Singrauli district of Madhya Pradesh) which is linked to Khurja thermal power plant in Uttar Pradesh. The proposal, which is pending with the environment ministry, states that over 11 lakh trees will be chopped off — a big price that the country might pay for a project which may not be needed at all.

The article, first published in The Times of India, can be accessed here.

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