Page 4 - Water Neutral Electricity Production in India: Avoiding the Unmanageable
P. 4
TERI Policy Brief
Water and Financial Viability of power plants 1986 (Amendments in 1999, 2001, 2002, 2002, 2002,
2003, 2004). These are broad regulatory requirements
Water scarcity has the potential to impact the financial viability of for the establishment and environmental clearance of
thermal power plants by affecting the project’s rate of return. This the thermal power plants. Recognizing the increasing
could be due to delays in project execution leading to cost escala- water stress in the country and the water guzzling nature
tion and revenue losses, as well as due to affects during operating of thermal power plants, MoEF & CC has stipulated in
life of the project. During operations, any drop in plant load factor 2016 that power plants should reduce their specific
may reduce the revenues. It has been assessed that each 5% drop in water consumption and bring it down to the below
plant load factor results in drop of nearly 0.75% in the projects rate of prescribed standards:
return . Also, additional expenses may be required for digging ponds/
drawing canals or pipelines, for extracting water from alternate/ All plants with once through cooling (OTC) shall
backup sources. install a cooling tower (CT) and achieve specific
water consumption up to a maximum of 4 m3/MWh
Moreover, compliance with the environmental regulations related to (cubic meter per Mega Watt Hour) within 2 years
maintenance of discharge water quality or quantity of water extracted period from the date of notification.
from the source, have cost burden on the plant operations. Quality
of intake water affects the operational expenses related to produc- All existing CT-based plants shall reduce specific
tion of Demineralized (DM) water. For example, presence of colloidal water consumption up to maximum of 3.5 m3/MWh
silica in intake water could increase the cost of DM water production, within 2 years period from date of notification.
exorbitantly.
New plants to be installed after January 01, 2017 shall
In 2015, Ministry has released Standard Terms of restrict specific water consumption up to a maximum
Reference for conducting EIA study for thermal power of 2.5 m3/MWh and achieve zero liquid discharge.
plans and prescribes specific assessments related to
water to be conducted. Hydro-geological study of the Additionally, there are some specific mandates that
area has been made a mandatory exercise of the EIA have been declared by the government, which
study to be carried out through an institute/ organization power plants have to follow. Most of the regulations
of repute to assess the impact on ground and surface discussed are suggestive of discharge standards,
water regime. It also asks power plants to visualize in except the recent orders in the form of amendments
advance the possible impacts on source water due to (vide notification dated 07.12.2015) to the Schedule I
water withdrawal by them, even in lean season, and of the Environment (Protection) Rules 1986.
submit a plan for specific mitigation measures to ensure
hydrogeological sustainability of the area. The mitigation Recently, Government of India has notified new
plan should also include a time bound action plan for Tariff policy on 28.01.2016 wherein it is mandated
its implementation. This is a significant improvement that the thermal power plant (s) including the
from the previous EIA practices and makes it binding existing plants located within 50 km radius of sewage
on power producers to ensure optimization of their treatment plant of Municipality/ local bodies/ similar
water usage. organization shall, in the order of their closeness to
sewage treatment plant, mandatorily use treated
Moreover, now power plants are also required to sewage water produced by these bodies and the
include a detailed plan for rainwater harvesting, its associated cost on this account be allowed as pass
proposed utilization in the plant, plan for optimization of through in the tariff.
cycles of concentration, along with a plan for recirculation
of ash water and its implementation. Standard terms Policy Gaps
of reference also stipulates that thermal power plants
cannot be located within 500m from the high flood level Regulatory
(HFL) of river system/ streams, and natural drainage
pattern of the area shall not be disturbed. The standard given by MoEF&CC for specific water
consumption is more than what CEA suggests. CEA
Some of the policies which the power plants have to guidelines recommend water use of 3.6 m3 /MWh (for
abide by in terms of pollution control and management plants in 1st year of operation) and 3.0 m3/MWh for all
include Water (Prevention and Control of Pollution) Act, thermal power plants4. While ToR given by MoEF&CC
1974 amended 1988; Environmental (Protection) Rules,
4 CEA Report on Minimization of Water Requirement in Coal Based Thermal Power Station,
January 2012
4 DECEMBER 2016
Water and Financial Viability of power plants 1986 (Amendments in 1999, 2001, 2002, 2002, 2002,
2003, 2004). These are broad regulatory requirements
Water scarcity has the potential to impact the financial viability of for the establishment and environmental clearance of
thermal power plants by affecting the project’s rate of return. This the thermal power plants. Recognizing the increasing
could be due to delays in project execution leading to cost escala- water stress in the country and the water guzzling nature
tion and revenue losses, as well as due to affects during operating of thermal power plants, MoEF & CC has stipulated in
life of the project. During operations, any drop in plant load factor 2016 that power plants should reduce their specific
may reduce the revenues. It has been assessed that each 5% drop in water consumption and bring it down to the below
plant load factor results in drop of nearly 0.75% in the projects rate of prescribed standards:
return . Also, additional expenses may be required for digging ponds/
drawing canals or pipelines, for extracting water from alternate/ All plants with once through cooling (OTC) shall
backup sources. install a cooling tower (CT) and achieve specific
water consumption up to a maximum of 4 m3/MWh
Moreover, compliance with the environmental regulations related to (cubic meter per Mega Watt Hour) within 2 years
maintenance of discharge water quality or quantity of water extracted period from the date of notification.
from the source, have cost burden on the plant operations. Quality
of intake water affects the operational expenses related to produc- All existing CT-based plants shall reduce specific
tion of Demineralized (DM) water. For example, presence of colloidal water consumption up to maximum of 3.5 m3/MWh
silica in intake water could increase the cost of DM water production, within 2 years period from date of notification.
exorbitantly.
New plants to be installed after January 01, 2017 shall
In 2015, Ministry has released Standard Terms of restrict specific water consumption up to a maximum
Reference for conducting EIA study for thermal power of 2.5 m3/MWh and achieve zero liquid discharge.
plans and prescribes specific assessments related to
water to be conducted. Hydro-geological study of the Additionally, there are some specific mandates that
area has been made a mandatory exercise of the EIA have been declared by the government, which
study to be carried out through an institute/ organization power plants have to follow. Most of the regulations
of repute to assess the impact on ground and surface discussed are suggestive of discharge standards,
water regime. It also asks power plants to visualize in except the recent orders in the form of amendments
advance the possible impacts on source water due to (vide notification dated 07.12.2015) to the Schedule I
water withdrawal by them, even in lean season, and of the Environment (Protection) Rules 1986.
submit a plan for specific mitigation measures to ensure
hydrogeological sustainability of the area. The mitigation Recently, Government of India has notified new
plan should also include a time bound action plan for Tariff policy on 28.01.2016 wherein it is mandated
its implementation. This is a significant improvement that the thermal power plant (s) including the
from the previous EIA practices and makes it binding existing plants located within 50 km radius of sewage
on power producers to ensure optimization of their treatment plant of Municipality/ local bodies/ similar
water usage. organization shall, in the order of their closeness to
sewage treatment plant, mandatorily use treated
Moreover, now power plants are also required to sewage water produced by these bodies and the
include a detailed plan for rainwater harvesting, its associated cost on this account be allowed as pass
proposed utilization in the plant, plan for optimization of through in the tariff.
cycles of concentration, along with a plan for recirculation
of ash water and its implementation. Standard terms Policy Gaps
of reference also stipulates that thermal power plants
cannot be located within 500m from the high flood level Regulatory
(HFL) of river system/ streams, and natural drainage
pattern of the area shall not be disturbed. The standard given by MoEF&CC for specific water
consumption is more than what CEA suggests. CEA
Some of the policies which the power plants have to guidelines recommend water use of 3.6 m3 /MWh (for
abide by in terms of pollution control and management plants in 1st year of operation) and 3.0 m3/MWh for all
include Water (Prevention and Control of Pollution) Act, thermal power plants4. While ToR given by MoEF&CC
1974 amended 1988; Environmental (Protection) Rules,
4 CEA Report on Minimization of Water Requirement in Coal Based Thermal Power Station,
January 2012
4 DECEMBER 2016
