Concept Note

Developing a Roadmap for

‘Implementing New Emission
Norms for Thermal Power
Plants’
 Implementing New Emission Norms for Power Sector
Background
India is the world’s third-largest GHG emitter accounting for 7%1 of the total global emission. Energy
sector, comprising of electricity production, manufacturing industries, transport sector and fugitive
emissions contribute to around 71%2 of country’s total GHG emission.

India has ratified Paris agreement on climate change and thus has agreed to a long-term goal of
keeping the increase in global average temperature to well below 2°C above pre-industrial levels, by
bringing down the greenhouse gas emissions.

This has marked a significant shift in the policies of the Government, especially in the sectors which
are key contributors to Green House Gas (GHG) emission in the country. India has planned to bring
down emission levels of all power plants to national standards by 2022. Government also has plans to
close very old power plants.

Ministry of Environment, Forest and Climate Change (MoEFCC) has been regulating emission norms
time and again for controlling the pollution levels from Thermal Power Plants (TPPs).

As per the MoEFCC’s notification dated 07.12.2015 to limit Emission in Thermal power plants, TPPs
were required to achieve the notified limit within 2 years from the date of the notification, i.e. by
07.12.2017. However, the deadline has now been extended to 2022 for the TPPs to comply with the
aforesaid norms.

As per the notification, the plants are categorized into 3 categories for compliance with the new norms,
namely those: -

(i) Installed before 31st December 2003

(ii) Installed after 2003 upto 31st December 2016 and
(iii) Installed after 31st December 2016.

Mg/Nm3 Plant Size Existing (prior) Installed before Installed between Installed
Standards 31st Dec’03 1st Jan’04 to 31st after 1st
Dec’16 Jan’17
PM All 150 – 350 100 50 30
SO2 <500MW None 600 600 100
>500MW None 200 200 100
NOx All None 600 300 100
Hg All None 0.03 (>500MW) 0.03 0.03

1
https://www.hindustantimes.com/india-news/india-among-highest-greenhouse-gas-emitters-in-2016-big-
coal-consumer/story-juJex1dknBvLxmQ275YN0K.html
2
http://www.dnaindia.com/business/report-energy-sector-emits-70-of-country-s-greenhouse-gases-2169900

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Water Consumption in TPPs

(i) All Plants with Once through cooling (OTC) shall install Cooling Tower (CT) and achieve
specific water consumption of 3.5m3/MWh.
(ii) All existing CT Plants must reduce specific water consumption upto 3.5m3/MWh.
(iii) All plants installed after 1st Jan’17 must achieve maximum specific water consumption
upto 2.5m3/MWh and achieve zero waste water discharge.

Implementing the New Emission Norms

Compliance with the new emission norms required retrofitting existing thermal power plants with
auxiliaries to control SOx, NOx and PM emissions such as Flue Gas Desulfurization (FGD), Selective
Catalytic Reduction (SCR), Electrostatic Precipitation (ESP) systems etc. However, to ensure
uninterrupted power supply in the country, the implementation has to be done in phases to avoid
problems in power supply, as many units cannot be taken out for retrofitting at the same time.

Central Electricity Authority (CEA), along with regional power committees, drafted a plan last year for
the phased implementation of FGD systems at power plants, covering approximately 160 GW of power
plant capacity.

FGD Phasing Plan

Year Capacity (MW) No. of units
2018 500 1
2019 11, 950 29
2020 24, 560 47
2021 61, 447.5 165
2022 61, 934.5 172
Total 160, 092 414
Source: CEA

However, FGD systems have been commissioned so far only about 1.8 GW capacity, against the 160
GW of capacity so far where FGD systems were planned to be installed.

Status of FGD implementation in commissioned units (MW)

Sector FGD Feasibility NIT issued Bids FGD
Planned Study completed awarded commissioned
Central 53,350 51,510 43,260 13,540 -
State 51,885 35,980 3,630 - -
Private 61,737 42,220 19,750 1,820 1,820
Total 166,972 129,710 66,640 15,360 1,820
Source: CEA Note: Status as of September 30, 2018

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Issues and Challenges
While the implementation of the new emission norms is a progressive move, there are various issues
and challenges which need to be addressed to ensure the smooth rollout of the aforesaid norms. The
various challenges are in the form of:

• Technology Constraints
• Availability of Limestone and Water Consumption
• Requirement of Additional Capex and Opex
• Space Constraints, etc.

Technology Constraints
Implementation of the new pollution control norms provides a huge opportunity to the indigenous
manufacturers in the equipment manufacturing segment. This will help boost the Make in India
initiative of the Government and help generate employment.

However, since very few of the power producers in the country have prior experience in the selection,
procurement, commissioning, operations, maintenance or commercial evaluation of Air Quality
Control Systems, for many of the developers it will be a learning experience as the industry grapples
from lack of standardization in specifications.

Availability of Limestone and Water Consumption

FGD systems using lime or limestone as the chemical reagent are widely used throughout the world
for SO2 emission control at coal-fired power plants. However, there are also issues related to limestone
availability and water consumption; for implementing the FGD installation plans in the thermal power
plants across the nation.

The mobilization of Limestone to power plants will create its own environmental foot-print, which
again needs to be analyzed and compared to the benefits incurred by installation of FGDs. A
rationalization plan, in this regard, will be required to optimize the overall emission reduction.

Requirement of Additional Capex and Opex

As per a recent Centre for Science, Technology and Policy (C-STEP) Report, the total cost of installing
pollution control technology in India’s thermal power plants is around ₹ 3.91 – 3.96 lakh Crore till 2030.
Out of this, equipment such as flue gas de-sulphurizer (FGD), catalytic reducer and electrostatic
precipitators alone will account for ₹ 2.57 lakh crore.

This entails additional burden on the project developers and requires huge capex and opex
investments. There are various concerns related to what should be the debt and equity ratio in these
investments, source of financing etc. One of the main challenges has been the reluctance on the part
of banks and other financial institutions to fund these investments due to high level of stress already
prevailing in the sector.

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 Technology Required Approx. Cost
ESP upgradation 5–15 lakh/MW
Partial FGD 25–30 lakh/MW
FGD 50–60 lakh/MW
SCR/SNCR 20–25 lakh/MW

The C-STEP study has projected that to meet the additional expenditure to meet the new emissions
standards, the electricity tariffs may need to go up by 25-75 paise per kWh. The revision in electricity
tariffs in order to meet the emission standards will be challenging to implement in many States, where
power tariffs are regulated. Power plants complying with notified emission norms should be allowed
special dispensation against additional expenditure incurred so as not to lose priority under Merit
Order Dispatch.

Space Constraints in TPPs

CEA has identified about 72 GW of thermal capacity that is not in a position to install FGD due to the
non-availability of space and hence will not be able to comply with the new SOx emission norms. It
would not be prudent to incur additional expenditure for meeting the norms partially for SPM and NOx
and thus could be phased out.

As per the analysis of Mumbai-based Motilal Oswal Securities Limited, the shutting down of some
capacity is not likely to disturb the grid much. However, closing as much as 72 GW (over 30 per cent of
the installed thermal capacity) can significantly lower the thermal capacity-to-peak demand ratio.

Also, half of this capacity is less than 20 years old and has not recovered its investments. Some plants
have, in fact, been commissioned in the past three years – for instance, Rihand power plant of NTPC
and Chhabra power plant of Rajasthan Vidyut Utpadan Nigam Limited. Further, some plants, such as
NTPC’s Korba and NTPC’s Vindhyachal, are very crucial and could pose serious grid operation
challenges if phased out.

With the closure of more than 25-year-old plants, the electricity market, which currently has excess
supply due to low demand for power, could balance sooner than expected. This would help
independent power plants and lead to demand for long-term power purchase agreements. It could
also boost investments in the transmission segment due to the realignment and construction of new
lines to connect the load centres to the new supply points.

Objective of the Workshop

Government has set a deadline of 2022 for compliance with the new norms in a phased manner.
However, there are various concerns in the minds of the various stakeholders (like Private Developers,
Financial Institutions and Equipment Manufacturers) regarding the aforesaid implementation. It is
imperative that the concerns of the industry are addressed to ensure the smooth transition.

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In line with this vision, Federation of Indian Chambers of Commerce and Industry (FICCI), under the
aegis of FICCI Power Committee, is planning to conduct a workshop for developing a roadmap for
facilitating implementation of new emission norms for thermal power plants in the country.

The major objectives of this workshop are:

• Initiation of a dialogue among the major stakeholders towards compliance of the new emission
norms and its comprehensive implementation
• Addressing the issues and challenges being faced by the industry in the implementation of the
revised emission standards
• Exploring available technologies and potential suppliers
• To take up the key findings and recommendations from the workshop with the Government
for advocacy on the issue

Workshop Date
The workshop is planned to be organized on 14th February 2019.

Research Methodology
The workshop would bring-in the various key stakeholders like MoP, MoEFCC, CPCB, CEA, CERC, Private
Developers, Equipment Manufacturers and Financial Institutions, under one platform to discuss and
deliberate the urgent actions which need to be taken for the smooth implementation of the New
Emission Norms.

• The workshop would consist of thematic sessions on ‘Framework of New Emission Norms’,
‘Technology of Pollution Control Equipment’ and ‘Financing of Emission Control Equipment’.
• The session on ‘Framework of New Emission Norms’ with speakers from CEA, CPCB will help
understand the regulatory framework and core issues around the new emission norms.
• The session on ‘Technology of Pollution Control Equipment’ will have participation of
Technology Suppliers and research organizations like NEERI. This will help in understanding
the equipment manufacturers perspective (related to capability, prior experiences etc.)
• During the session on ‘Financing of Emission Control Equipment’, speakers from leading
Financial Institutions will give the lenders perspective on funding investments on FGD, SCR etc.
• The jist of these sessions will be presented in the final Valedictory Session. Secretary – MoP
and Secretary – MoEFCC would be attending the final Valedictory Session as the Guest of
Honour. During the Valedictory Session, there would also be consultation among the various
stakeholders in the presence of the Secretary – MoP and Secretary – MoEFCC on the issue.
• The findings from the workshop will be compiled in the form of a white-paper, which will be
submitted to MoP and MoEFCC for perusal.

A tentative agenda is attached herewith as Annex.

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Market Opportunity for Equipment Suppliers
The implementation of the new emission norms has created a huge business opportunity for the
equipment manufacturers of FGD, SCR etc. To comply with the emission standards, power producers
will have to make significant investments in installing Pollution Control Technologies (PCT), i.e., ₹ 0.5–
1 crore (INR 5–10 million)/MW for nearly 80% of the plants by 2030. This will create an industry
opportunity of around ₹ 2,50,000 crore (₹ 2500 billion) for the pollution control equipment industry,
over the next 15 years.3

Plants in five states (Maharashtra, Uttar Pradesh, Chhattisgarh, West Bengal and Andhra Pradesh) will
account for over 50% of the total costs needed for PCT installation, till 2030. Privately owned plants
will face the highest costs for implementing these standards (over 45%), followed by state-owned
(32%), and centrally-owned plants (24%).

State-wise share of PCT Investment required

14%

12%
45%

10%

10%
9%

Maharashtra Uttar Pradesh Chhattisgarh Andhra Pradesh West Bengal Other States

Outcome of the Workshop

The outcome of this Workshop will be

1. A consensus being created among various stakeholders of the sector on the issues and
challenges and a likely agreement being formalized for the smooth transition of TPPs to newer
emission reduction technology
2. Awareness on various available technologies for controlling SOx, NOx and PM

3
http://www.cstep.in/uploads/default/files/publications/stuff/CSTEP_Report_BCA_of_Emission_Standards_for_TPPs.pdf

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 3. A white-paper consisting of key findings and recommendations from the workshop for
advocacy on the issue to help address the concerns of the industry in complying with the new
norms

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 Workshop on ‘Implementing New Emission Norms for
Power Sector’
Date: 14th February 2019
Venue: Federation House, Tansen Marg, New Delhi
Theme: Developing a Comprehensive Roadmap for implementation of New
Emission Norms for Thermal Power Plants
Time Slot Session Key Themes Speakers/ Panelists
9:30 – 10:00 Registration
10:00 – 10:05 Welcome Remarks by FICCI
10:05 – 10:10 Opening Remarks by Shri K Krishan, Chairman, FICCI Climate Change Committee
10:10 – 10:30 New Emission Norms in Power Sector (Impact, Implication & Path Forward) by Dr. Anshu
Bharadwaj, Executive Director, CSTEP
10:30 –12:00 Panel Discussion on Session Chair
Framework of New Emission
Shri A.K. Jain, Additional Secretary, MoEFF&CC
Norms
Speakers
Agenda of the Panel
Discussion: Dr. Prashant Gargava, Member Secretary, CPCB
State of Preparedness - Shri Ghanshyam Prasad, Chief Engineer (R&R),
Controlling SOx, NOx, SPM, Ministry of Power
Mercury & Water Conservation
Shri P.D. Siwal, Member (Thermal), CEA
• Overcoming Installation
Dr. Arbind Prasad, Chairperson, JSERC
Barriers
Shri Anand Kumar, Chairperson, GERC
• Implementation Plan and
Roadmap Shri Prabir Neogi, Chairman, FICCI Power Committee
and Chief Executive - Corporate Affairs - RP- Sanjiv
• Cost Implications and
Goenka Group
Solutions
Shri S.K. Chatterjee, Joint Chief (Regulatory Affairs),
CERC
Shri Ashis Basu, CEO- Energy Corporate, GMR Energy
Ltd.
Shri Ashok Machher, President (Corporate Affairs),
Hindalco Industries Ltd.
Dr. Arunabha Ghosh, CEO, Council of Energy,
Environment and Water
12:00 – 13:30 Panel Discussion on Session Chair
Technology of Pollution
Dr. Rakesh Kumar, Director, CSIR - NEERI
Control Equipment

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 Agenda of the Panel Speakers
Discussion:
Shri S.N. Roy, Chairman, L&T
• Manufacturers’ Perspective
Mrs. B.Padma S.Rao, Senior Principal Scientist, NEERI
• Users’ Perspective
Shri Ashwani Kumar, Chief Executive Officer, IL&FS
• International Experience Energy
Shri Mohit Bhargava, Executive Director, NTPC Ltd.
GE Power India Ltd.
Thermax
13:30 – 14:30 Networking Lunch
14:30 – 15:40 Panel Discussion on Session Chair
Financing of Emission
Dr. Arun Kumar Verma, Joint Secretary, Ministry of
Control Equipment
Power
Agenda of the Panel
Speakers
Discussion:
Shri P. Suresh, Head – Project & Infrastructure
• Funding Universe and
Finance Group, ICICI Bank Ltd.
Impact
Dr. Fareed Ahmed, ED, Punjab and Sindh Bank
• Bank Finance and Lenders’
Perspective Shri Nitin Jain, Partner (Restructuring & Turnaround),
Ernst & Young
• Scope of Alternative
Finance – Series Funding, Shri Priyavrat Bhati, Programme Director (Energy
Equipment Finance, Zero Programme), CSE
Coupon Bonds Shri Sanjay Jain, Sr. VP (Research), Motilal Oswal
• Context of Stressed Assets Securities Ltd.

• Scope for Fiscal Incentives JSW Energy Ltd.

SBI

15:40 – 16:00 Tea/Coffee Break

16:00 – 16:10 • Welcoming the Guests of Honour (Secretary- MoPower & Secretary- MoEFF&CC) by Shri
K Krishan, Chairman, FICCI Climate Change Committee
16:10 – 16:30 Summarized Presentation Outcome Presenatation on the Panel Discussions by Ms.
Shweta Srinivasan, Research Scientist, CSTEP
16:30 – 17:00 Guest of Honour Address Address by Shri Ajay Kumar Bhalla, Secretary, Ministry
of Power, Government of India
17:00 – 17:30 Guest of Honour Address Address by Shri C.K. Mishra, Secretary, Ministry of
Environment, Forest & Climate Change, Government of
India
17:30 – 18:00 Concluding Remarks Shri Prabir Neogi, Chairman, FICCI Power Committee & Chief Executive
(Corporate Affairs), RP-Sanjiv Goenka Group

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 18:00 High Tea
Onwards

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