Environment

These plans and announcements of Indian Government go against Global Environment Day theme

While ‘Time for Nature’ is the selected theme for this year’s World Environment Day, is India really following it in letter and spirit?

‘Global Strategic Communication Council’ has compiled some developments and announcements since the COVID-19 outbreak that seems to go against the global Environment Day theme.

Projects cleared without proper due diligence

At a virtual meeting held on the 23rd of April 2020, close to 30 projects received environmental clearance from the Ministry of Environment and Forest and Climate Change. Due to the COVID-19 lockdown, the meeting was held virtually, making discussions on exact locations of the project, as well as seeking clarification, difficult. For example, a 3,097 MW gravity dam project in Dibang valley in Arunachal Pradesh, said to irreversibly damage pristine forest and riverine growth, was one of the 30 projects cleared. All of these projects were in forest lands rich with biodiversity. The projects affect tiger reserves, wildlife corridors, and sanctuaries, including a coal mine in an elephant reserve in Assam, a highway through a wildlife sanctuary in Goa, and a limestone mine in Gir National Park.

Going back on the coal washing promise

Through a notification dated 21st May, 2020, and issued by the Ministry of Environment, Forest, and Climate Change, India went back on the promise it made to regulate ash content of coal, ahead of the Paris climate agreement. The new notification does away with the need for coal power plants based more than 500km away from coal mines or pithead coal plants to use coal with ash content less than 34%. The new notification allows coal power plant operators to use coal regardless of its ash content while depending on the operators to follow proper ash disposal practices as well as meeting emission standards.

What emission standards?

New emission standards announced in 2015, also just before the Paris agreement, required coal power plant operators to retrofit flue gas desulfurisation (FGD). The deadline for implementing was extended from 2017 to 2020 for some and December 2022 for others. From the total 166.5 GW, close to 55 GW worth of coal power plants needed to comply with the new emission standards by 31st December 2019. So far, in the national capital, only two of the 33 coal-fired units that produce 12.8 GW of power have installed FGD units. While non-complying coal plant operators in Punjab and Haryana have been fined by the Central Pollution Control Board, the action is yet to be taken against non-complying coal plant operators in UP, Jharkhand and other states. According to a study done by the Centre for Science and Environment, close to 70% of coal power plants will not meet the deadline to comply with emission standards by December 2022.

Privatisation and expansion of coal mining

Since 2016, the Indian government has been announcing its plan to open up its coal mining sector to the private sector. Using COVID-19 economic recovery, finance minister Nirmala Sitharaman announced a renewed effort towards this goal. The finance minister announced that a new process of auctions and mine allocations will be announced soon. She said close to 50 new coal mines will be up for the taking for both domestic and foreign mining companies. The decision to open up coal mining to the private sector as well as expand coal mines goes against environmental realities, climate commitments, as well as market forces. A slowing economy has significantly reduced power demand.

Shrinking demand, but new coal power plants still being announced

Despite coal power overcapacity and under-utilisation in Madhya Pradesh, the state power regulator gave its approval to buy power from Adani Power’s yet-to-be-constructed 1,320 MW coal power plant. According to www.power.carboncopy.info, between 22nd March and 30th May – year-on-year average power demand has reduced by 17.7%, whereas coal power generation has reduced by 24%. Coal power plant utilisation, its plant load factor, in April slumped to 42%. KPMG forecasts coal plant utilisation will drop to 35% by 2022.

PFC’s ₹90,000cr loan to power distribution companies:

Announced in the COVID19 economic recovery package by the Finance Minister, Power Finance Corporation (PFC) is supposed to loan 90,000crs to help power distribution companies pay off their outstanding dues to power generating companies.

Unequal tariff, subsidies, transmission loss and theft, and long-term power-purchase agreements with thermal power units that bleed money have collectively resulted in a DISCOM financial mess. The outstanding dues from DISCOMs to power generators has only escalated due to the COVID-19 lockdown. While the government is right in finding a solution to the immediate problem of clearing payments, the long-term hemorrhaging of cash also needs to be fixed. With India’s sovereign rating being downgraded by several credit rating agencies, including the recent downgrade by Moody, raising funds would become all the more expensive for the PFC.

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