The Indian Government has announced a relaxation of the 2015 mandate for installing flue-gas desulphurisation (FGD) systems in coal-fired power plants, reported the Economic Times.
This move is expected to reduce electricity costs by Rs0.25 ($0.0029) to Rs0.30 per unit, according to officials.
The new rules will apply only to plants within 10km of cities with populations of more than one million people while other sites will be exempt.
The decision, detailed in a government gazette notification, follows a comprehensive analysis by the Central Pollution Control Board. The board’s findings indicated increased carbon dioxide emissions from the operation of existing control measures, prompting a re-evaluation of the FGD installation requirement.
The exemption will apply to nearly 79% of India’s thermal power capacity, with plants in critically polluted areas or non-attainment cities to be evaluated individually.
The differentiated compliance approach is based on the proximity to urban populations and the sulphur content of the coal used.
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By GlobalDataThe framework for this policy change was established after extensive discussions and independent studies. Research conducted by institutions such as IIT Delhi, CSIR-NEERI, and the National Institute of Advanced Studies (NIAS) showed that ambient sulphur dioxide levels in most parts of India are within the National Ambient Air Quality Standards.
These studies revealed sulphur oxide levels ranging between three and 20 micrograms per cubic metre, well below the NAAQS limit of 80 micrograms per cubic metre.
They also raised questions about the environmental and economic benefits of universally mandating FGD systems in India, where coal has a relatively low sulphur content of less than 0.5%.
The NIAS study highlighted potential environmental drawbacks, including an additional 69 million tonnes (mt) of CO₂ emissions from 2025 to 2030 due to the activities associated with FGD systems such as limestone mining and transportation.
The anticipated reduction in electricity costs is expected to benefit consumers directly. This cost-saving measure is particularly significant in a high-demand, cost-sensitive market like India, where it could help state electricity distribution companies contain tariffs and reduce government subsidies.
The financial implications of mandatory FGD retrofitting were substantial, previously estimated at over Rs2.5tn ($29.1bn), equating to Rs120m per megawatt, with installation timelines extending up to 45 days per unit.
Concurrently, India is focusing on meeting its growing electricity demand through renewable energy sources. A report from the Rocky Mountain Institute outlines India’s approach to harnessing clean energy while addressing affordability, job creation, domestic production, and competitiveness.
India’s electricity demand is projected to triple by 2050, driven by increased vehicle usage and air conditioning needs.
