Coal-based "merchant" power plants- A threat to ecology and livelihoods

  • 14/11/2010

 (From my website
  1. While India is seriously engaged in global climate talks, it has simultaneously launched a highly misconceived plan to set up private “merchant” power plants based on coal. It has literally become a laissez faire strategy, without any concern for the livelihoods of the people whose lands are forcibly taken away and without any consideration whatsoever for protecting the precious ecology of the country. I will explain why such an approach is misconceived in more detail in the following paragraphs.
  1. Coal-based thermal power plants are expected to cater to steady demand for electricity. That explains why they are called “base load” power stations. There are operational constraints to switching on and switching off these power stations at will, to meet peak loads that occur for limited periods during day. Usually, in the Indian context, not more than 50% to 60% of the electricity demand in any region is steady in this sense. As hydro-electric power plants (even open-cycle gas-based power plants) are more suitable for meeting the residual peak demand, an optimal base-load vs peak-load generation mix in line with the demand pattern, is recommended. If the proportion of thermal is in excess of this, the thermal power plants will be forced to back down often during the day. It will constrain the thermal power plants from reaching their full capacity levels, resulting in a higher unit cost of electricity imposed on the consumer and causing peak-time shortages that debilitate the economy.
  1. At a more conceptual level, India should have addressed its electricity planning exercise more from the side of demand management than from the supply side. It should realize that “negawatts” are cheaper to obtain and less destructive, compared to megawatts that destroy the ecology and the livelihoods of the people.
  1. Taking undue advantage of the laissez faire merchant power policy initiated by the Centre, the Andhra Pradesh (AP) government has permitted a large number of developers to choose the sites they want and set up power plants as they like, wherever, in whatever form they wish. As of now, about 40,000MW of capacity has been committed and sites already allotted to accommodate that capacity.
  1. The developers, instead of negotiating and buying the lands directly from the farmers, have coaxed the government into either forcibly acquiring private lands and allotting the same to them, or alienating to them government lands of their choice, both at throw-away prices.
  1. One can appreciate the wider implications of this policy by looking at specific examples. Three sites, each running into thousands of acres, are wetlands that the Centre has vowed to identify and protect in its Cabinet-approved National Environment Policy. India is committed to conserve wetlands under the Ramsar international Convention on Wetlands and two other international conventions, one on conservation of migratory bird species and another on conservation of bio-diversity. In almost all these cases, the Environment (Protection) Act, 1986, Water, Land and Trees (State) Act, 2002, several rules and regulations to protect water bodies and greenery etc. have been violated by the companies and the government.
  1. Coal-based power plants contribute significantly to green house gas (GHG) emissions. Added to this, wetland degradation is also a major contributor to GHG emissions. The secretariat of Ramsar Convention has issued an advisory to member countries to prevent any such degradation to protect the global climate. Having submitted numerous “compliance” reports to Ramsar Convention, internally, India’s Environment Ministry has chosen to ignore its commitments when it came to this obnoxious merchant power policy.
  1. One site of another thousand acres is covered under an irrigation project constructed by the government agencies out of the funds allocated under the Tribal Budget, meant for the tribals. There is another project for which 1100 acres of land has been allotted, out of which 730 acres are within CRZ (it reminds one of the Adarsh Housing Society scam in Maharahtra). Both the Centre and the State have jointly suppressed the facts in this case to wink at the developer misusing the land for a decade. MOEF even went out of its way to revive an environment clearance that had lapsed long ago.
  1. These projects have rendered many farming communities homeless and deprived several fishing households of their traditional fishing rights.
  1. A more disconcerting aspect of this merchant power policy is that the State has not cared to regionally disperse these power projects to minimize their possible cumulative impact on the people.
  1. In Srikakulam district alone, for example, including the proposed nuclear power plant at Kovvada, about 10,000MW of capacity has been mooted. The National Environment Appellate Authority (NEAA) has commented on this adversely and suggested a more comprehensive and integrated assessment of the environment impact of such projects.
  1. In Nellore district, within 5km of Krishnapatnam Port, the State has permitted a whopping 28,000MW of coal-based thermal generation capacity to come up! All around Krishnapatnam, these power projects will create a pollution cauldron, unprecedented in the country. Assuming that these power plants will burn domestic and imported coals in the ratio 70:30, once they start operating, they will burn 400,000 tonnes of coal daily, spew out 141,000 tonnes of ash per day on the ground, into the water bodies and into the air, deposit 20,720 tonnes of sulphu per day and 15,000 tonnes of nitrogen into the air, in addition to many other toxic particulates such as mercury, arsenic, zinc, cadmium and possibly some radioactive isotopes that have been found in coal. A generation capacity of 28,000MW will drain 84 million cubic meters of water every day from the sea nearby and pump back large quantities of heat into the sea waters to destroy the marine resources!
  1.  It is inexplicable how a responsible State has acceded to this. It is far more inexplicable how MOEF has started clearing these plants, project-by-project, without looking at the cumulative impact of such a large number of plants on the lives of the people and their environment. These facts have been brought to the notice of Shri Jairam Ramesh, Minister of State (MOEF) but he has chosen to remain silent so far. If all these projects are allowed to come up, he will be presiding over the greatest environmental disaster ever to happen in the country. His Ministry, instead of discharging its obligation under Article 48A of the Constitution, will create a pollution hub unparalleled in the history of industrialization in the country.
  1. These merchant power plants are supposed to earmark about 20% of their power to the State and sell the rest to other consumers. It is doubtful whether all of them can ever operate to their full capacity. Knowing the dubious track record of many of these private power plants, they are sure to become mill stones around the neck of the State soon, like the infamous Dabhol (erstwhile Enron) project. One should not be surprised if these projects debilitate the finances of the State utilities and even the finances of the State itself, once they come up.
  1. These plants call for a large well-planned transmission system which is yet to get conceptualized. It shows how ill-planned and ad hoc is the decision to permit such a large number of projects to come up all at once, concentrated in small localized areas.
  1. Andhra Pradesh is not alone in this environmental mayhem. Karnataka, Maharashtra, Chattisgarh, Jharkhand, Arunachal Pradesh and several other States are queuing up to woo these same developers to coax them into setting up similar plants that will destroy their own respective environments!
  1. The merchant power policy of the States is apparently prompted by reasons extraneous to power development. There have been reports that illegal links exist between some of these developers and the errant mining companies that have been similarly given mining leases in some of these States. Perhaps, an apt way to describe all this is to call it “corruption electrified”.
  1. The merchant power policy that has become rampant in India raises issues concerning India’s stand in the ongoing climate talks. One can understand if what India is doing has served genuine public interest, in which case, our negotiators could take a strong position and bargain for outcomes that would help the public at large. Unfortunately, the case of coal-based merchant power does not fit into any such logic. By adopting such a strategy, India has embarked on a highly self-destructive exercise.
  1. I appeal to the civil society to raise its voice on this, pressurize the government into revisiting this policy and ensure that development projects serve the public interest, not promote private plunder. Merchant power policy of the government has little to do with “development” of the economy and it has more to do with extraneous factors. The government has not looked seriously at alternative sources of energy, including “negawatts” that will provide electricity at a much lower cost to the economy, cause no displacement of people and no disturbance to the ecology, a win-win proposition for the people.