In one of the key developments impacting the coal-based power generation segment, the Ministry of Environment, Forest and Climate Change (MoEFCC) recently issued a notification allowing the use of unwashed coal at thermal power plants (TPPs). With this, the ministry has annulled the notification issued in January 2014 that mandated the supply and use of washed coal with ash content of not more than 34 per cent at coal-fired power plants located beyond 500 km from the supplying mines and also those located in urban and environmentally sensitive areas. The rationale behind the MoEFCC’s move is that the ash content remains unchanged in washed coal and coal washing entails increased water use and effluent generation, among other things. Instead, the environment ministry has directed TPPs to install technology solutions for handling ash content.
A closer look at the new notification and its implications for thermal power producers….
Details of the new notification
The MoEFCC has issued the Environment (Protection) Amendment Rules, 2020 vide a notification dated May 21, 2020. With this, the ministry has amended the Environment Protection Act to drop the mandatory washing of coal for supply to TPPs. The notification allows the use of coal by TPPs without stipulations regarding the ash content or location distance, subject to certain conditions.
Further, the notification stipulates that TPPs would be required to set up technology solutions for complying with the specified emission norms for particulate matter, as per extant notifications and instructions issued by the Central Pollution Control Board from time to time. In case of washeries, middling and rejects will be utilised at TPPs based on the fluidised bed combustion (FBC) technology. The washery will have linkages to FBC plants for middling and rejects.
Regarding the management of ash ponds, the notification states that TPPs will comply with conditions, as notified in the fly ash notification issued from time to time, without being entitled to additional capacity of fly ash pond (for existing power generation capacity) on ground for switching from washed coal to unwashed coal. Further, TPPs would dispose fly ash in abandoned or working mines (to be facilitated by mine owner) with environmental safeguards. Appropriate technology solutions will be applied to optimise water consumption for ash management. The segregation of ash may be done at the electrostatic precipitator stage, if required, based on site-specific conditions, to ensure maximum utilisation of fly ash.
On the coal transportation front, the amendment states that the transportation of coal may be undertaken by covered railway wagon (railway wagons covered by tarpaulin or other means) and/or covered conveyer beyond the mine area. However, till such time that the enabling rail transport/conveyer infrastructure is not available, road transportation may be undertaken in trucks, covered by tarpaulin or other means. Besides, a TPP developer must ensure that rail siding facility or conveyor facility is set up at or near the power plant, for transportation by rail or conveyor. If transportation by rail or conveyor facility is not available, the developer must ensure that the coal is transported out from the delivery point of the respective mine in covered trucks (by tarpaulin or other means), or any mechanised closed trucks by road.
The notification also includes that the amendment will be deemed as additional conditions of the relevant environmental clearances for projects from the financial year 2020-21 onwards. Further, the existing environmental clearances stand modified so as to make the new conditions operative for relevant sectors.
Rationale behind the move
The power and coal ministries and NITI Aayog had earlier made their submission to the MoEFCC in favour of allowing the use of unwashed coal at TPPs. The ministries contended that the mandatory use of washed coal at power plant requires to be revisited, citing that this would be beneficial for the power generation segment, especially for plants receiving coal through long-distance haul, without any adverse impact on the environment.
Based on the submissions of the ministries, the MoEFCC noted that the extent of ash content in mined coal remains the same, even after washing. Further, it was noted that with coal washing, the ash content gets divided at two places (washeries and the power plant), whereas if unwashed coal is used in a power plant, the ash content is handled at only one place, that is the power plant itself.
Apart from this, TPPs are technologically equipped to address pollution control and ash management as they have high efficiency equipment to capture fly ash, dry ash evacuation and handling systems, ash supply systems for ash utilisation and tall stacks for wider dispersal of flue gases. Besides this, the MoEFCC has already notified emission norms, mandating TPPs to adhere to such norms in a time-bound manner. Therefore, the MoEFCC reckoned that it is beneficial that developers adopt the best possible framework towards handling of unwashed coal including management of fly ash and other associated environmental aspects arising out of processing unwashed coal at different stages.
In addition to this, various other reasons were also given by the ministries and NITI Aayog for doing away with the mandatory use of washed coal at power plants. These include the fly ash generated at TPPs is being put to several beneficial uses such as cement manufacturing, brick making, road laying, back-fill material for reclamation of mine voids and low-lying areas.
With regard to coal washing, it was noted that washing results in and adversely impacts topography of a region, water drainage pattern and quality, water bodies, and air quality at a large scale, thereby increasing the power generation cost without commensurate environmental advantages. On the coal quality front, it was submitted that with the improvement in coal quality in terms of the size of coal and presence of extraneous material, wear and tear of all the related equipment has reduced considerably over the years.
Apart from this, the requirement of using coal with average ash content of 34 per cent prompts industries to import coal, resulting in foreign exchange outflow. Further, the coal ministry also submitted that in view of the current Covid-19 pandemic, there is an immediate requirement of domestic coal utilisation by stimulating the coal sector demand for power generation in the country. Therefore, it is desirable to do away with the mandatory coal washing at the earliest.
To conclude, although the ministries of power and coal as well as NITI Aayog have given a thumbs up to the revocation of the mandatory use of washed coal at power plants, this move has received disapproval from various industry experts and stakeholders. Some of the reasons being cited in favour of coal washing are that the washed dry-fuel yields better plant load factor, reduces plant emissions and saves freight costs, and that these compensate for the extra cost of washed coal. Regarding the washery rejects, it is being argued that use of washery rejects in the mine fills do not create pollution and is a popular practice world over to dispose off the rejects. Apart from this, with the growing focus on meeting the environmental norms, along with this new move of allowing the use of unwashed coal, there is likely to be greater uptake of flue-gas desulphurisation system, leading to escalation in power tariffs.
Net, net, with industry experts and stakeholders divided over the use of unwashed coal at power plants, it would be best to empirically study the impact of using unwashed coal for power generation vis-a-vis the erstwhile practice of using washed coal to decide the future course of action.