Talwandi Sabo power plant flouts green laws to save `400 crore
PATIALA: The Talwandi Sabo Power Limited’s (TSPL’s) 1980MW coal-fed power plant has been violating environment laws and burdening the consumers to tune of `280 crore per year to save in excess of its own `400 crore on superior coal (washed coal), since it became operational in 2014, investigations carried out by Hindustan Times have revealed.
The TSPL in league with Punjab State Power Corporation Limited (PSPCL) officials ignored the power purchase agreement (PPA) conditions and power regulator orders for using washed coal at its private Talwandi thermal plant, leading to `280crore burden on the PSPCL consumers. By doing so, the TSPL saved approximately `435 crore, it is learnt.
The plant let the per unit power production cost go up by 40 paisa to save `300 crore annually. Higher production cost is one of the reasons that consumers have to pay more for power. Despite being seized of issue, the PSPCL management hasn’t made any effort to bring down the cost.
The TSPL management, which runs the largest power plant in Punjab, admits that it is flouting the environmental laws when it comes to the coal it uses at the plant.
Though the plant has modern features to minimise the ecological ill-effects, neither PSPCL nor pollution control board took cudgels to ensure compliance of conditions that TSPL had agreed to while signing the power purchase pact with the power corporation.
MANAGEMENT USING UNWASHED COAL TO SAVE MONEY, PUTS BURDEN OF `280 CRORE PER YEAR ON CONSUMERS
The average per unit cost of power at L&T’s Rajpura plant is between `4.25 and `4.50, whereas it ranges between `4.9 and `5 at Talwandi Sabo plant, this despite the fact that the latter has bigger operations that should have lowered the cost.
Perusal of the records shows that the Talwandi plant has been using unwashed coal that produces ash up to half of its weight, leading to more transportation costs, which are recovered from power consumers.
The TSPL used washed coal up to November 2014 and then opted for the unwashed substitute, resulting in PSPCL ending up paying higher variable cost to the TSPL. The variable cost that ranged between `2.13 to `2.19 per unit (average `2.16) from July to November 2014 stood between `2.41 and `2.86 (average `2.61) when TSPL stopped using the washed coal.
As per the ministry of environment and forests notification, all the coal-run thermal plants located beyond 1,000km from the mine shall use coal having ash content not exceeding 34%. The TSPL is located at a distance of 1,700km from Odisha’s Mahanadi Coalfields Limited (MCL) from where the coal is procured. The ash content of the coal being used is up to 50% of the weight, which is against the environment (protection) rules as well as the pact signed with the PSPCL.
HOW AND WHY COMPANY DID THIS
As per the power purchase agreement, the PSPCL has to pay the TSPL fixed charges and variable cost (coal price and transportation cost). The coal is washed to minimise the ash content by up to 25 to 30%.
“Washing cost is approximately about `900 per tonne. During the washing, about 10% gross calorific value (GCV) worth `140 per tonne is lost. In a bid to save this money, TSPL in league with PSPCL officials used coal of higher ash content, which resulted in costlier power production,” said a PSPCL official.
As per standardised calculations, washing reduces overall weight of coal by 2% for every 1% ash removal. As MCL coal has about 10 to 15% higher ash than the 34% limit, so on an average, coal weight will get reduced by about 25% after washing. Railways’ per tonne freight charges in case of TSPL is `2,700, which can be cut by up to `675 if the washed coal is used. The money thus saved will be PSPCL’s gain and subsequently consumers will have to pay lesser.
As per records, up to September 2016, the TSPL used 42-lakh tonne unwashed and only 6.50-lakh tonne washed coal. Thus PSPCL has been paying approximately `280 crore extra in freight charges per year to the TSPL, which saves nearly `435 crore on account of washing expenditure.
Sources said a PSPCL’s team tests coal at the TSPL plant and it brought the issue of use of coal having ash content up to 50% to the notice of the management, but the latter took no cognisance.