Why we need better policy on reusing discontinued power plant site

Once a closure decision of power station is made, the land remains unutilised for six to 10 years

By DTE Staff
Published: Tuesday 24 April 2018
India lacks a comprehensive policy on post-closure utilisation of power plant site. Credit: Agnimirh Basu__

In the middle of the buzzing city of Bathinda, four giant cooling towers of a thermal power station stand tall. For many years, four power generating units (2X110 MW and 2X120MW) of this coal plant have been a symbol of the city. However, on January 1, 2018, the state government announced that it would shut down the plant, saying it was expensive to produce power from these old and inefficient units.

"In the past four years, the plant was functional for an average 15 days in a year while incurring monthly expenditure of Rs 1,300 crore. The electricity from the plant costs Rs 11.5 per unit as compared to Rs 2.5 to Rs 3 per unit (the rate at which Punjab buys electricity). Therefore, it is not wise to keep making huge expenditure,” said Manpreet Singh Badal, the state finance minister, days before the decision was announced. According to the government, the decision to close down the power station was carried out in a systematic and methodical manner, ensuring that no one loses his job. Despite repeated assurances of complete rehabilitation of workers, the closure decision has sparked huge waves of protest.

Discontentment over power plant closure

Workers allege that these newly renovated units, despite operating at an efficiency of about 36 per cent (Indian average efficiency: 32 per cent) have been shut down, disregarding the fact that the power station still had 10-15 years of operating life. They resent the fact that even Rs 509 crore spent on its renovation has not been recovered, and allege corrupt practices motivating the closure decision.

It has also been alleged that the real motivation for closing the power station was something else. According to Padamjit Singh, patron, Punjab State Electricity Board Engineers' Association, the government is moving away from power generation business to make way for private players. The government, according to him, has excessively estimated the electricity demand and signed unnecessary expensive contracts with private players. “For instance, Reliance Sasan and Vedanta’s TSPL have boilers and turbine units that are of Chinese make, and in a controlled pricing market both these units should have same fixed costs. However, in reality, Sasan charges 70 paise per unit and TSPL charges 130 paise a unit. Similarly, Tata Mundra and Nabha power L&T have Korean-made boilers and Japanese turbines. However, Nabha power charges the state 152 paise a unit and Tata Mundra charges 92 paise,” adds Singh.

Punjab State Electricity Board Engineers' Association alleges that the decision was arbitrary in nature. They claim that the Power Secretary of Punjab wanted to run the power station, while the CMD of Punjab State Power Corporation Limited (PSPCL) decided to close it down. PSPCL’s Board of Directors was also unavailable at the time of decision making. Interestingly, even now, vacancies  exist at director’s level in PSPCL.

The employees association also claims that the decision to shut the plant was taken three years ago, keeping everyone else in the dark. "The company had put in efforts to engage lesser number of employees over the last three years and strategically reduced the number of employees at the station. At the time of closing, there were 959 regular and 635 contractual employees, quite a small number compared to other power stations of Punjab. The regular employees were absorbed by the company and the contractual employees were engaged in other contract-based works," says Darshan Singh Dev, superintendent engineer, Bathinda thermal power station.

Power plant before the closure

Usually, power stations are built in remote locations, and getting to the site itself is an arduous task. However, Bathinda is an exception. Spread across 2,200 acres on the periphery of a national highway this power station is located in a fairly developed part of the expanded city with shopping malls adjacent to it. The power station was built in the middle of the city 44 years ago to meet demand of the city and nearby villages. It served prime loads of the city and also supported agriculture around the villages.

In 2003, the station was selected for renovation and modernisation to improve its performance and extend its life under a World Bank programme that applied to many stations across India. Coal power plants are designed to run efficiently for 25 years, beyond which they are recommended for closure. Renovation adds another 15 years to the power station’s life. The renovation of Bathinda power station was taken up in two stages. The first two units were renovated between 2004-2008, while the other two units were renovated between 2010-1014, and restarted only in 2015.

Not all is lost

Kuldeep Kumar Garg, ex-chief engineer, Bathinda thermal power station, asserts that the station as a whole was not cost competitive, as only two units were very efficient, while another two were not. The government should have, in his opinion, considered unit-wise heat rates (parameter for assessing efficiency) and not the station heat rate. "Station-wise heat rate was considered and not unit-wise heat rates, hence, even the efficient units were forced to shut. Regulatory commissions should independently verify claims on heat rate. Unit-wise variable pricing should be encouraged. State load dispatch centres (SLDC) should call units for generation and not stations,” he adds. The private coal power stations in Punjab operate at an efficiency of as high as 38 per cent, and have engaged maintenance agencies to monitor and ensure this efficiency all through, at the risk of paying penalties to the company if the efficiency drops.

Plans on reuse or redevelopment of the discontinued power plant site are being discussed, though nothing has been finalised yet. “We are planning 100 MW of solar power plant at the location. We might outsource construction and operation to private players. But the plan is still under discussion,” says Bhushan Kumar Jindal, superintendent engineer–technical director to Generation, PSPCL.

No decision has also been taken on the components that need to be disposed. "Currently, we are proposing to float tenders to sell the components for reuse in other stations, followingt which the unused should be sold off as scrap. This process will take two to three years," says Dev. According to him, the existing units can be modified to co-fire biomass and coal (see box below: Temporary solution suggested to effectively utilise the efficient units). This way, both the efficient units can be utilised while scrapping process of the other two units can continue. It will also ensure that the plant equipment does not remain stranded. Else, it appears that once a closure decision of coal power station is made, the land remains unutilised for six to 10 years. Under such circumstances, it would be prudent for the government to announce a better land use and closure policy.

Temporary solution suggested to effectively utilise the efficient units

  • Use biomass + coal to operate the units till recovery of R&M costs
  • One additional boiler will be required at the plant
  • With this set up, the efficient units can be put in use and air pollution issue can also be resolved
  • Plant will be able to operate with 70 per cent coal and 30 per cent biomass

It is to be noted that:

  • 2.2 million tonnes of biomass is generated in Punjab
  • 15 MW generation requires – 70, 000 tonnes paddy straw
  • Bale type residue can be used –no pre-processing required

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