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Revised emission norms for TPPs to cut emission by 40%: ICRA

29 Nov 2016 Evaluate

Domestic rating agency ‘ICRA Ratings’ in its latest report on Power Sector has stated that the government’s revised emission norms for thermal power projects (TPPs), which were notified in December last year, are expected to cut emissions from these big emitters by as much as 40 per cent. It has said that they are set to impact operational coal-based capacity of 187 GW and under-development capacity of 74 GW.

ICRA further said that compliance to these norms within the given timeline will be challenging, since the companies are apprehensive about the cost recoverability and timely approvals for such a cost under the change in law by the regulators. The coal-based power projects are required to invest in additional equipment capital expenditure to comply with the revised emission norms. ICRA estimates that this would entail a capital investment of Rs. 0.6 crore to Rs. 1 crore per MW, based on the ageing of the plant, amounting to an aggregate capex requirement of about Rs. 1.2 trillion1 which is likely to materialise over the next 2-3 year period, assuming implementation delays.

ICRA however, expects that the move will boost the domestic capital goods sector (power generation equipment) over the medium term, which has been hit by a slowdown in fresh orders. The MoEF has stipulated the existing TPPs to follow the revised standards by December 2017 and new projects starting their operations from January 2017 are required to comply with these norms from the commissioned date.

The revised standards seek to reduce the emission of particulate matter, sulphur dioxide, oxides of nitrogen and mercury. The revised norms also aim to reduce water consumption by all existing TPPs to 3.5 m3/MWh and require new plants commissioned on or after January 1, 2017 to keep their water consumption levels below the maximum of 2.5m 3/MWh and ensure zero waste water discharge.

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