India’s push towards net zero emissions by 2070 appears to have saddled it with a king-size dilemma. To start with, it must drastically reduce the use of coal for power generation. Yet, shutting down thermal power plants is easier said than done since this is beset by social, economic, and environmental impacts, which were neither anticipated nor planned for. Above all, shutting down plants is costly, amounting to billions of dollars.
When thermal power plants were first built in India in the 1960s and ’70s, they were expected to meet the urgent requirement for energy. Global warming did not exist even in distant imagination, which is why little thought was given to the aspect of closing down coal-powered plants. Though on paper such plants were supposed to last 25 years, they were allowed to function well beyond their end-of-life cycle. The present reality has, however, drastically altered the picture.
India bravely announced at Glasgow in 2021 that it would achieve net zero carbon emissions by 2070. But it soon realised that translating its commitment into action meant that it had to replace ‘dirty’ coal-fired power plants with renewable energy generation. But shutting down coal-based thermal plants presented enormous unforeseen difficulties.
Since the turn of the century 432.5 GW (giga watt) of coal power capacity has been retired worldwide, according to the Global Energy Monitor. Of this, 60% of the retired capacity was in the US and China, 7% in the UK, 6% in Germany, 4% in India and 2% in Canada.
In the initial years, the plants were shut down as they had become old and inefficient. Only during the past decade or so have thermal power plants been shut down due to environmental reasons.
The 705-megawatt (MW) Badarpur Thermal Power Station (BTPS) in Delhi, for example, was shut after fly ash from it was identified as one of the major factors contributing to air pollution in India’s capital. After the 2015 Paris Climate Accord, however, pressure has been building to reduce dependence on coal for power production as it constitutes one of the dirtiest fuels that increases atmospheric CO₂.
In 2018, the National Electricity Plan (NEP) identified 22 plants for retirement with capacity just under 6,000 MW. Next on the list were another 30 plants with a capacity of 16,787 MW, which would be 25 years old by 2022. The NEP 2023 has listed 19 more plants with a capacity of 26,900 MW for retirement.
Closure of thermal power plants, as in the case of any large industrial establishment, is accompanied by its own set of problems. The problems have four principal facets: the first with regard to the existing manpower and the second with respect to remediation or to substantially undoing the environmental damage to the site due to the running of the plant. Next is the fate of the land on which the plants were set up, which were leased out to operators, and the last is about the substantial financial implications of this transition. None of these aspects was considered at the time of setting up the plants simply because the concept of climate change due to global warming was considered an esoteric science with little data to support the hypothesis.
Shutting down plants will mean that their existing employees have to be either compensated for their economic loss or provided alternative employment. This is not all: entire townships have come up around big thermal plants, creating an economic system in which large numbers of people find employment in small businesses and shops that service the needs of the main power plant workers.
In Talcher, Odisha, for example, the plant was shut down on April 1, 2021. Soubhagya Chandra Pradhan, a trade union leader, related their plight at a conference organised in Delhi in September by the International Forum for Environment, Sustainability & Technology (iFOREST).
According to Pradhan, the contract workers were simply asked to stop attending work without any notice. A school that was being run by the plant management for about half-a-century was closed down overnight without alternative arrangements for existing students and the workers quarters turned into a ghost colony.
iFOREST estimates put the total number of people employed in the thermal power sector in India at just under a million, of which about two-thirds are informal workers. Perhaps another million are employed in the economy that services the regular employees. “In the 25-year scenario, where power plant capacity is gradually closed as units reach the age of 25 years, an estimated 192,028 formal and informal workers would lose employment as 51.4 GW is closed by 2030,” says an iFOREST report.
Another 6.5 lakh workers are likely to be added to this number by 2040. These numbers give an idea of the magnitude of the human problem that would be on the country’s hands over the next two to three decades. As of now there are no dedicated guidelines under labour codes and regulation to facilitate what has come to be called labour transition.
Apart from the human problem there is the question of repairing the environmental and ecological damage caused by the plants. While fly ash was the reason behind the closure of the Badarpur NTPC plant, it is one of the less problematic byproducts of burning coal since it can be recycled into concrete and bricks. Other more poisonous materials that are a health hazard are left in bottom ash, which contains poisonous metals like mercury, arsenic, lead and polychlorinated biphenyls that leach into the ground. Besides, demolition would leave hazardous substances like asbestos, widely used in buildings. Remediation means the cleaning up of the site of the plant and freeing it of toxic materials before repurposing it.
While there are no laws that mandate the clean-up of decommissioned coal power plants, the Central Pollution Control Board (CPCB) drafted environmental guidelines for decommissioning coal-fired plants in 2021. According to iFOREST, at present power plant owners have the sole right to decide the fate of their retired power plants, unless it is on leased land in which case it is up to the government. But owners are not legally required to remediate the sites of decommissioned plants.
A total of 125,891 hectares of land at the moment is occupied by thermal power plants in the country—an area the size of Delhi that will become available over the coming decades. Land ownership is a crucial consideration in decommissioning of thermal plants because it has implications for both repurposing and remediation.
This brings up the next important question of how to find the means to finance all these activities. Given India’s current and upcoming coal-based capacity at 240 GW, an estimated $16 billion will be needed for these activities over the coming years, according to iFOREST.
The cost of decommissioning the Badarpur plant has been, for example, ₹380 crore. Working on these calculations for the 25-year scenario, it would cost about $3.3 billion (approximately ₹27,000 crore) to decommission plants over 2022-30. As of now, the only two ways of recovering decommissioning costs are by salvaging of funds through sale of land, plant and machinery. The other way to recover decommissioning costs is through increased tariffs once a new legal provision mandates decommissioning. But this mechanism is not well developed while salvaging operations may fall well short of decommissioning costs as in the case of the Badarpur and Bathinda plants.
If the transition from coal-based plants is to be ‘just decommissioning’ that includes dismantling, clean-up, remediation, repurposing and support to workers and local communities, iFOREST feels that India will need a regulatory framework to enable it.