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Home News Power Sector News Government may allow power plants to pass on expenses to meet environment norms

Government may allow power plants to pass on expenses to meet environment norms

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EnvironmentThe government may allow power plants to pass on their investments in equipment to meet stringent environmental norms to consumers, and such costs will not be included during preparation of dispatch order to ensure these plants remain competitive.

The government is expected to soon issue an advisory in consultation with the Central Electricity Regulatory Commission towards this, a government official said. "The power ministry is likely to hold consultations in this regard with the power regulator," the official said.

Power producers had sought a clarification from the ministry and the regulator to incur the costs for meeting the environment norms. The projects would require an estimated Rs 70 lakh to Rs 1 crore per megawatt capital expenditure to meet the norms and the clarification was required to comfort lenders, the producers had told the ministry. The capital expenditure is estimated to raise the tariff by about 20-30 paise per unit.

The ministry of environment, forest and climate change had in December 2015 notified revised standards for coal-based power plants in the country to curb emissions. Power plants were given two years to comply with the notification. The power ministry has advocated an extension of the deadline.

A power ministry official said that implementing the norms within two years was not possible.

The ministry has sought plant-wise deadline extension to meet the norms, he said. The schedule has been made after extensive discussions with regional and state load dispatch centres to avoid grid disturbances, he added.

"It will take a minimum of three years for required changes to be made in one power plant during which the plant has to be shut down," the official said. "It's not possible to shut the entire capacity and it has to be done in a phased manner to avoid supply disruptions."

He also said technology and equipment manufacturers are not in a position to meet the requirements for 200 GW projects. The country's top power generator NTPCBSE -0.73 % has ordered equipment for 30,000-40,000 MW plants, the person said.

An industry official said the exercise to finalise technology and costs for implementation of the new environment norms and clarification on cost pass through will take time.

"Banks and financial institution would be willing to finance the new equipment for environmental norms only with an assurance that the costs can be recovered through tariffs," the person said.


Source- ET


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