Page 50 - Tcexpression2021 - Sept to Dec 2020

Recent Developments & The Way Forward: and trade restrictions. At the current situation,
completion of all FGD installations across India by 2022
At the beginning of 2020, several power plants (about 48 is very unlikely to occur.
GW) already missed the revised deadline for retrofitting the
FGD system. CPCB also furnished notices to 15 coal-based Limited domestic FGD technology suppliers/
plants (about 14000 MW & 31 units) for non-compliance of Vendors are available in India, and many leading EPC
environmental regulations which might face closure. contractors, sub-vendors are saturated because of
ongoing parallel FGD projects. The restrictions imposed
Environmental penalty (Rs. 18 Lakhs/Unit/ Month) on the power equipment import from China could
was to be imposed for continuing non-compliance result in bottlenecks of supply chain & procurement
of CPCB directions. However, currently, the Supreme process. There are challenges envisaged in sanction &
Court of India has placed a stay order on environmental granting of funds/loans for FGD retrofit from Financial
compensation issued to plants who challenged this Institutions, especially since many power plants
penalty. currently fall under NPAs / stressed assets categories.
Clarity is further required for addressing significant
Supreme court rejected the petition filed by revenue losses to be incurred & power crisis during
Association of Power Producers (APP) for blanket the unit shut down period. Market price fluctuations
extension of deadlines for FGD installation, from 2022 of CAPEX from unit/capacity wise benchmarked values
to 2024. Central Electricity Regulatory Commission provided by CEA are being observed, due to recently
(CERC) issued the Draft Amendments to incorporate modified government policies related to tendering/
temporary increase of electricity tariff for FGD retrofit of import and pandemic scenario. Other roadblocks to be
Independent power producers, which was a significant taken care involve long-term procurement of reagent
development in the tariff-revision aspect. MOEF & CC & unequal price escalations in the future, along with
have also allowed thermal power plants to use coal disposal/land requirement of a considerable quantity of
having more than 34% ash content. CERC recently byproducts, if it could not be sold.
mentioned in tariff paper that power producers should
be permitted to recover 90% of additional CAPEX cost The Ministry of Power has recently recommended
due to APC equipment retrofit over 25 years. in a letter to MOEF & CC, to extend the deadlines for
implementation emissions norms by two years (i.e. till
Due to security & defence escalations at the borders, 2024), for over 200 units comprising 100 GW generating
Haryana government decided to annul two tenders capacity coal-based thermal power plants. Ministry
of FGD project contracts with Chinese firms worth is presently considering this matter alongside an
over INR 1000 Crores for 2x300 MW Yamunanagar evaluation of its implications on environment & public
TPP & 2x600 MW Rajiv Gandhi TPP in Hisar thus health. Further confirmation/amendments by MOEF
putting into effect the trade ban proposed by Indian &CC on the relaxation of deadlines are still awaited.
Government. Many state & central sector power plants Although the journey ahead is long with unavoidable
are expected to take similar measures as we advance, obstacles in its path, the industry is marching steadily
leading to a boost in indigenous manufacturing & towards cleaner power generation, thus gaining better
domestic business. Citing transgression in border clarity & progressive elaboration.
areas, cybersecurity threats & significant cash outflow,
Power Ministry also imposed restrictions/ban on Considering practical challenges, the deadline
importing power equipment from China & few other for compliance with environmental regulations
countries, requiring the Government’s necessary was extended by MOEF & CC from 2017 to
approval. Moreover, regulations have been introduced a more realistic schedule till 2022. CEA also
on Public Procurement from neighbouring countries developed a phased unit-wise schedule of FGD
and registration of bidders are now required under implementation for smoother execution &
Competent Authority. power supply reliability in consultation with
the power producers. Considering market
The FGD execution phase’s progress is considerably trends & cost of technology, retrofit, and the
lagging from the planned schedule, with very few cumulative capital investment, these initiatives
Orders awarded especially in the Private and State are estimated to cross over INR 1 Lakh Crores,
sector. This progress further decelerated in the last few one of the largest modern-day investments in
months due to the unprecedented Covid-19 pandemic the Indian power industry.

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