Environmental Compliance for Indian Thermal Power Plants: Lessons and Insights

Hi, we had visiting us Deborah’s
Seligsohn. She’s a Scholar Researcher at the University of California, San Diego
and has been interested in working long issues of power plants, air pollution for
quite a while and is a very fascinating. You’ve had a chance to really see China
and India up close. So, a lot of people in India look at China to see trends
and what they’ve done because just some years back India and China were very
similar in terms of their installed power plant capacity for example, and
then China took off in the 90s mainly and some of that growth was due to smaller
plants, sometimes dirtier power plants, which were very provincial if not local in terms
of jurisdiction and control and now China’s being on a spree for the
last few years heating up not just because air pollution concerns over the
global concern but for other reasons as well and so India-China compares in this…what are some of your insights or Is it that India is going to end up following
the same path as China? Share any thoughts you have in India and China or
power plants, coal power plants perspective. So, India and China are often
compared on air pollution and they’re pretty similar at this point in terms of
the amount of pollution exposure per capita, the difference is that India is
on rising curve where it’s increasing every year and China now has five years
of a decreasing curve or the amount of exposure is actually going down. So, China
actually in the last few years has started to do things, especially in the
power sector, that are effectively cleaning up. In terms of power itself, I mean, China has more than four times the install capacity of India and it supplies
electricity to its entire population and actually had solved that
problem basically at some point in the nineties in terms of connectivity and
in terms of access but in terms of reducing shortages it’s pretty much
solved that recently, although that’s been one of these things where it went
up and down and up and down for years where they would over build and solve
the supply problem then they would cut off building in plans and the
supply run will re-emerge but at this point it seems like it’s pretty much in
balance especially because the total demand isn’t increasing that fast
anymore. The economy is slowing down a bit but also there’s the shift from
industry to services that means that the amount of electricity you need per unit GDP (or the growth especially) is tapering so so that’s a big change in China whereas in
India you’re still very much in a growth mode. And there, it’s clear that the
amount of installed capacity in India is not actually sufficient to meet the
actual demand if everybody had access and the supply were 24*7. So,
there’s a clear demand for more power in India and so whatever regulations are
done for pollution need to take into account not just the amount of power
plants in India now, but the amount that are likely to be in India in the future.
And that’s an area where a lot of people have said renewables have a great future
not just ahead of them but it started to grow dramatically but that has not
been to a level that we stop coal or even measurably make a dent into the coal
trajectory that’s envisioned for a few years and so coal is not going away
anytime soon and so the question is how do we make it as clean as possible?
And so India has put out some much more stringent than before norms that are due
to go into effect 2017 for power plant emissions. Tell us about them. Are they
tough? Very tough? Doable? What reactions? Comparisons? Things like that.
So, the norms for existing power plants I would say are a little looser than is the
case elsewhere in the world. If we’re comparing to China, the US or Europe,
but they are a substantial improvement over the previous. So, India
previously has only had a norm for particulate matter not for Sulfur Dioxide or NOx or
Mercury and all three of those come in with the new standards and the important
thing to remember because in India in last couple years everybody has gotten
on this, it’s all about PM 2.5 bandwagon, is that the source of PM 2.5 is not just
particulate itself. The Ash. It’s also the Sulfur Dioxide and the
Nitrogen Oxides that lead to PM 2.5. Basically they’re emitted as gases but
then there’s a chemical reaction in the atmosphere and they turn into
particulates. They turn into Sulfates and Nitrates and so, what you’re breathing in
is PM 2.5 from many sources some of which started as particles themselves
and some of which started as gases so when you want to address PM 2.5, you
actually have to address all of the pollution sources not just the stuff
that starts as particulate. So, this new sulfur regulation is really important.
For new plants, the Indian Standard will be the equivalent of US and European
standards and the Chinese standard as of 2011 but the Chinese are actually
bringing in a new standard that will be by far the strictest in the world.
Moreover, unlike the US certainly the Chinese are forcing retrofitting on
everybody. There’s nobody that’s going to be allowed to emit at the old levels – so no grandfathering – so, what the Chinese are doing, which I think is what kind of
makes sense in India, is you close down the oldest, dirtiest ones, especially since you mentioned it, they tend to be smaller, and you put good
equipment on the new large plants. Chinese Plants are very large. The typical
unit is 600 Megawatts but new plants in India are coming in often at 660 or
800. So, these large efficient units are sort of the way everybody’s been going.
So, there’s two dimensions of norms. One is are they doable? All the cost, anything is
doable at a cost and effort, and the second is just measuring it, monitoring it,
compliance and these sorts of things. So, Can you talk a little about any of these things?
So, on the doable question although the technology we’re talking about is 1970s
technology and some of it may have been perfected over time but we’re not
talking about modern technology. We’re not even for the most part talking about
things that are under patent. It’s readily available with multiple suppliers.
Lots and lots of suppliers. Indian suppliers? Not now, because India has never required
anything but what are called ESPs. Electrostatic Precipitators. So,
this is for the particulate. For Sulfur, what you want as equipment called Flue-gas desulfurization (FDGs) or commonly called Scrubbers. Those are readily
available from multiple international suppliers US, Europe, Japan, Korea, China
but India is currently installing the first two it has ever had. So, it just
doesn’t have a history of producing these. For Nitrogen Oxides, the most
common used is something called SCR and I’m going to forget what the initials
stand for but Yeah something like that.
It’s definitely a Catalyst and again there are lots of suppliers in the
world but it’s never been done in India. I understand talking the power sector
here that they need to do a little bit of experimentation and testing on how it
work with Indian coal because of ash. Because of the ash. So, the SCR has to
go in at the beginning of the process before they remove the ash so they have
to figure out how the catalyst.. Because you need it warm. You need very hot. So, they
need to figure out how the catalyst is going to work and what the sort of how
much deterioration they’ll get within the system and things like that so
there’s definitely a little work they need to do. Some of the power companies
have started to do that so that’s very good sign. If it is Scrubbers, I don’t think
there’s anything they need to do. The Sulfur ….
something that needs to be tackled by quickly and even though people believe
India’s low-sulfur coal run on average that is partly negated because of the
low calorific value of coal. More and more coal do. So, there is still. You
couldn’t just say that Indian coal is low sulfur and therefore we don’t
need equipment. Is that correct? That’s correct and unfortunately what you just
said is what had been said in India for many many years. Without a lot of
attention paid to measuring with the actual sulfur dioxide what’s coming out
of the Power Plants. Now that people are actually measuring that,
I think there is a growing understanding that what, that first of all, Indian coal is more medium sulfur than low sulphur It’s not as low as the Powder River in
the US which has lowest sulfur coal in the world. and there’s this heat content problem
what ultimately matters is how much you’re learning. So, in
terms of sensors are sort of detecting in is there any insights from China
because it seems that the tighter your spec is, the harder it is to actually
tell what’s going on. So, any thoughts or suggestions in that part?
Yeah, so the Chinese have shown that you can do this very quickly. I mean they
have you know at the time they started more than double the number coal-fired
power plants that India has currently and install this continuous emissions
monitoring equipment throughout the country in about three years. So, you can
get it on quickly you can sort of connect everybody up it took them about
that long to connect it…what they’ve also shown is to start getting results you
need to connect it at all levels – local, provincial, national. You can’t just leave
it up to your local because what the problem in China and there are
some suggestions you may have similar promise here is that the local
government may prefer to just collect the fines rather than enforce the
controls, right. Cost of doing business For the local government,
it may become a source of income. So, what you really need to do is make sure
that it’s being watched at multiple levels, so getting the whole system
connected and integrated. India is definitely in the process of
implementing CEMS (continuous emission monitoring system). It seems to be being done state-by-state. They’re not all as
far as I tell using a unified system which is a problem because then it makes it
much more difficult to integrate to the national level. Each state is sending out it’s specs. So, it was departments. It was viewed as a local state issue. Yeah!
So, I would suggest with CEMS that it would be better if they think about an
integrated national system. The other thing they should think about early is
transparency. This information can be made available to the public. It’s now in
real time. You can .. Well, when I checked a few months ago
there were 40 power stations in China that were already putting their data
online probably. They’re probably more now. So, you can put it online publicly
the same… The connection to your local pollution control board can easily
also be put on the web. So, especially in India with your vibrant free press and
NGOs that are interested, it would be very very useful to have that data
available to the public because one of the big gaps in India is that the
pollution control boards are very understaffed. Can we get some numbers? Yeah, so
for example – the Delhi Pollution Control Board has 200 staff of which most of
them are support staff. There are 24 engineers. The state of Bihar which is
one of the largest state level governments in the world [in terms of]
population of the state has 75 staff. A state with a lot of staff is like Maharashtra with a couple thousand. If you compare that the US EPA has 18,000 staff
and we have about the equivalent at state and local level. In US it’s actually hard to add up
– it’s a federal system. China has probably about the same number
of total staff in the country as the US.. somewhere around 30-40 thousand, fewer at
the national level than the US has and many more at the state and local level.
So, I went to Yantian which is a medium-sized city in China – Six and a
Half million people and they have 4.5 thousand people working for their
pollution control board equivalent and they have.. their’s are called
Environmental Protection Bureaus and they get down with the very local level.
So, they have people at the city level and then within the city they have
people working at the district level, right, whereas in India, you have a State
Pollution Control Board and then you typically in a big state like
Maharashtra, Gujarat with a lot of industry, you have a couple of the old
offices and that’s the most you have anywhere in India. City governments do have
some environmental workers but they’re typically working on sewage and solid
waste. They’re not working on air pollution. So, one of the big problems this
leads to is, yes, you need to put continuous emissions monitoring
equipment on they can watch at headquarters but you also need inspectors to
go out and make sure that it’s being run correctly, that if no bypasses going on. Yeah, so in China… So let’s assume people don’t want to go
fake, let’s assume their intent is correct.. At a technical level, are there
issues just of the quality of the sensors or calibrations on runs like
that? So, that’s an interesting thing that I’ve discovered in India is that
typically these are power plants are only calibrating over six months. The US
EPA, you need to calibrate every week. The Chinese are calibrating every two
weeks. So, I don’t know if the equipment is exactly the same but I’m a little
surprised by this. So, that’s certainly something someone
needs to study right and figure out. The another point is so it
appears that there will be a mix of time frames with which different plants
to work don’t put in retrofit equipment or choose different paths from new equipment.
New plants are coming up now a lot of your older plants, not the very old
which the government wants to shut down, for example – there’s some 34 or
38 Gigawatts that is talked of being shut down, but there will be some that
need not be or could not be shut down practically speaking but if they’re
older, they may not have such a long life ahead of them. So, does it make sense to
do them work? What’s in it for them to be sure that they get their money back that
they’ll actually did get that investment in clean technology back? What are some
things or just that isn’t current norm meant to be a tariff petition that you
had a tariff that was approved before and now because you’re complying with the
statutory requirement, you’re allowed to charge more for being compliant. Is
that a long drawn-out process to be simplified? So, one of the things in terms
of the timing is when the regulation came in so it was announced in December – last
year, due to be implemented by December 8, 2017 – that is incredibly tight.
It’s hard to imagine that even if, everybody started working really hard on
day one, they could get every power plant that needed to retrofit equipment
up and running within two years because they need to first study, they need to do
a design for their individual power plant, they need to do a procurement but as
you mentioned they needed a new approved tariff to be able to afford the new equipment.
So, that adds a step but even if we ignore that step, you need to do a designing,
you need to do a procurement, you need to actually get the equipment delivered on
a site and then you need to do is scheduled
shutdown for the installation. It’s going to be 60-90 days days that the power
plant has to be closed while an FDG is installed then an SCR. If you do them both
together that’s going to save you time long run but it’s probably
more like 90 days. So, within an area the Electricity Regulatory Commission is
gonna have to schedule these shutdown, so that they’re not all shut down at the
same time. My understanding in India is that they actually have to apply to
the regulator for permission to shut down. So, you are expected
it’s gonna be a couple years even if everybody had the equipment for this
scheduling of shutdown. So, if you figure that design and procurement takes at least a
year, that you’re talking at least three years, if not more, to get the whole
country deploy. The Chinese deployed about 80% of the country in
about three years but there are reasons why their system is simpler than the Indian
system and that’s what you were raising about the tariffs. So, in India right now every plant
has to apply independently for a tariff as you mentioned, they have legal
justification for asking for a higher tariff because it’s a legal impose costs
on that but they still separately need to apply for new tariff for each unit in
each plant. In China, the government simply said you will get ‘x’ amount more
money for direct running your scrubber, running your SER and it’s a different
amount for each piece of equipment. So, the power plants didn’t need to think about
the cost beyond that they could just look for the least cost supplier and go
ahead and install the equipment. In terms of shutdowns, India’s in a good place right now
because at least in terms of the amount of power that’s being purchased by the
distribution companies – the discoms – there’s excess power in the system. Now, I
don’t view that as real surplus because there’s a lot of members of the public
that are not getting the electricity that they want but in terms of what the
discoms are willing to buy apparently there’s 24 gigawatts of power sitting
idle. So, if you can get that online you easily should be able to balance it out
to do a nice scheduled shutdown in different plants to do this retrofit
but it still it takes several years. So, it seems clear and certainly what the power
companies are asking for is that the government put out a schedule for
realistic installation of the equipment, so that I mean it seems obvious they’re
not going to make it by December but the question I have is right now it seems
like the government is going to criticize the companies in December for
not meeting it and then may negotiate a schedule. Why not sit down now? and have a planned collective project roll for the next several years. The companies
will of course asks for lots more years but you can reasonably think about
what a logical number of years are, and I don’t think it has to be many many and I
think in three or four years you can get it done and you could also maybe target
bang for buck… …yes and all one’s closer
to large habitations and things like that. Yeah, absolutely but these new
standards should be done. I mean the amount of sulfur being emitted right now is really and it’s been growing very very fast in India and when people look
at the NASA satellite data on sulphur a lot of that is coming from
power sector because remember power in India is almost 70% coal use. That’s
different than China where it’s only 50% and even though it’s a lower
percentage in China, just attacking the power sector they’ve been able to make some inroads in terms of cutting pollution. So, that’s in some
ways good news because there are only a few hundred power plants across India… we don’t have as much heating requirement as China does. Right! You
talked about this push toward PMs catches everyone’s attention especially
Delhi and certain cities but combustion seems to lead to much more PM
2.5 while different numbers on what is air pollution or even PM – they’re
different measures PM 2.5, the the finer grain. There’s even PM 0.1 or PM 10 which is easier to measure and has historically been measured across
India. Are there some insights or lessons or warnings on just how they compare,
combine, compile numbers? Well, so in India you’re not measuring PM 2.5 in
all the major cities and that’s important and that’s what you should be
measuring. In smaller cities, they’re still not measuring it and you’re also
not measuring out away from the cities …a lot of the pollutants which is why the
sulfur numbers get missed in the sulfur contribution to PM 2.5 because in the
power plants in India are not right in the city.. They’re further
away but that sulfur dioxide moves and it becomes PM 2.5 in the cities. So, I
think there’s that issue but in terms of the measurement, yeah, if you’re measuring
PM 10 because there’s so much dust in India – there’s a lot of construction, thus a lot of road dust – that that PM 10 numbers are gonna be really high.
So, it makes it difficult to compare cities that have PM 10 and PM 2.5 as
their measures. I don’t think any of this is absolutely critical because the point
is its all too high and it all should be cut and they’re reasonable things that
should be done. I mean things like covering construction sites, things like
fixing roads, they are important – the other thing … while the PM
2.5 causes more health problems than the PM 10, if you fix a road, not only do get
rid of the dust that is annoying to people you also ensure that your
vehicles are performing better. So, it’s at and the vehicles are big source of PM
2.5. both as particulate and as the NoX that turns into particulate in the
air. So, all of these things are important. The reason I’ve been focusing on the
power sector is its got a lot of bang for your buck. It’s a very concentrated large
source of pollution, so if you can do something in these few hundred power plants around the country you can actually make a dent and you may be able to bend the
curb and start reducing pollution rather than seeing it continuing. Clearly there’s
a lot that can be done and is being worked on and we need multi-stakeholder
engagement to have actionable achievable targets and mechanisms. There’s always
the elephant in the room – cost – and I think consumers understand that better
quality whether it’s air or any… costs a little more. Is this a very large
number we normalize it for example in rupees per kilowatt hour? or is it only
10-20 paise or something like that? I think that maybe something citizens and consumers are willing to absorb. So,
so right now in India there’s a lot of debate about what the costs are going to
be but that has a lot to do with the fact that there are no local suppliers and most of
the companies have not done a great deal of research with international suppliers.
If we look at the Chinese case, they wound up on giving the power plants
essentially equivalent about 15 paisa additional for adding the sulfur
controls and then about half that in addition for adding the Nitrogen
controls. So, we’re not talking about huge huge numbers and if we consider, that
renewables are really important and they tend to cost a little more, it’s going to
be useful to actually add to the coal price to encourage renewables. So, it has
kind of multiple benefits in the system. The key thing is for the power plants to
be incentivized, you need to first of all make it easy for them to get a new
tariff and secondly I think you should change the dispatch rules so that – the
dispatch is what order power plants are brought on to the system based on demand –
and what India has right now is renewables get put on the system
first, which makes total sense, but then among coal
plants the cheapest ones go first and if you change it, as they have already done in
China to make the greenest ones go on first, that if, you don’t have your
equipment up and running, you won’t get added to the grid, you would really make
a huge difference and you would incentivise firms to add the equipment
early rather than later because they could get on the grid sooner. And we ask for a return with the capital investment but the operation. Yeah because if they
don’t run they don’t make money. Yeah and so it maybe important just thinking
out loud that you may have a hybrid system because that may be very
expensive or at least perceived to be expensive. So, that’s a process and I
think the discussion that we will need to continue at another day because I
just there’s a lot that you shared with us. It’s not something you and I can
answer as scholars. I mean the thing is it’s not that expensive. You know, I
mean the running costs of the scrubber is essentially 1% of the energy
in the facility. So, the costs are not out of this world. It’s quite doable and most
of the rest of the world has done it and it’s great that India now has these new
standards that should really help with a major problem – Air Pollution. Fantastic.
Thank you for joining us and sharing some of your insights and we look
forward to chatting with you, when you’re visiting back.

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