Role of thermal power plants and coal mining in local area development and addressing regional imbalance - Note by Prayas to Government of Maharashtra

The Prayas Energy Group, Pune had in August 2011, released a report titled “Thermal power plants on the anvil: Implications and need for rationalisation” on the large number of thermal power plants (TPPs) being proposed in the country. Prayas based on analysis of Ministry of Environment and Forest (MoEF) data indicated that the Ministry has accorded environmental clearances to a large number of coal and gas-based power plants whose capacity totaled 192,913 MW. Another 508,907 MW are at various stages in the environmental clearance cycle.

The report highlighted that close to 7,00,000 MW of thermal – coal and gas based – capacity addition was in the pipeline, in various stages of the environmental approval cycle of the MoEF. This is a huge capacity, and the proposals have many implications for power sector planning and functioning, for the environment and ecology of the areas where these plants are to come up, for local communities subjected to displacement and pollution, for the opportunity costs of the resources that are to be used, namely, coal, gas, land, water etc. and for the economy as a whole.

Coal-based plants account for 84 per cent of the projects in the pipeline, the report said. It called for an immediate moratorium on any further grant of environmental clearance for thermal power plants. The Prayas report indicated that the projects in the pipeline were largely concentrated in a few areas. Only 30 districts (or 4.7 per cent of the total 626 districts in India) will have more than half of the proposed plants with their capacity adding up to about 3,80,000 MW. Many of these districts are adjoining, and thus the real concentration of power plants is even higher than that revealed by the district-wise figures.

District-wise capacity addition in pipeline

Image courtesy: Prayas

According to the report, the private sector had stepped in a big way and accounted for 73 per cent of all the projects in the pipeline. The report stated that there was a need to revamp environmental clearance procedures to minimise the social and ecological impact.

Massive expansion of thermal power plants in Vidarbha

Maharashtra is the number one state in terms of the projects in pipeline, with a total of 89,269 MW. Most of these plants are being planned in Vidarbha (41,195 MW) or Konkan (30, 978 MW). This has serious implications for the issue of balanced development of the state.

Recently in June 2012 Prayas Energy Group has submitted a note to the Government of Maharashtra’s Committee to study "Alternative approaches to balance regional development in Maharashtra State", headed by Dr. Vijay Kelkar. In December 2011, Prayas made a presentation on the above-mentioned report to the Kelkar Committee. This presentation, while giving an overview of the Indian situation, was focused on the projects in pipeline in Maharashtra and their implications. Subsequent to that, the Kelkar committee requested Prayas to make a more detailed submission on the issue of proposed thermal power plants in Maharashtra. This note is in response to the request.

The note states that a large number of thermal power plants, adding up to around 40,000 MW capacity, are in pipeline in the Vidarbha region of Maharashtra. One of the reasons offered for these thermal power plants is that they are a means to ensure local development using local resources, primarily the resources of coal, water and land. They are also being seen as vehicles to address the regional developmental imbalance.

Image courtesy: Prayas

However, the nature of the developmental imbalance, the experience of the existing thermal power plants and coal mines in the area and other evidence of the impacts of thermal power plants and coal mines shows that there are several problems with these claims. Such claims for thermal power plants need to be reassessed.

Moreover, other developmental options, including agricultural development and water resources development may be more effective options for the region. It is important to examine and prioritise amongst such options. If such a process also suggests that thermal power plants should be built, then this should follow certain conditions and processes, outlined in the note, to ensure minimisation of damage and optimal developmental impacts.

As a part of the data gathering for this note, a team of Prayas members also visited some parts of Vidarbha, mainly Chandrapur, Ghuggus and Warora to look at the coal mining and thermal power plants and their impacts. The team met people of the area including common citizens, affected people, journalists, activists, mine and power station workers, experts etc. as well as officials.

This note is organised as follows –

The first section, “Introduction”, briefly presents the resentment and protests around the existing and proposed thermal power plants and coal mines in Vidarbha, why this presents a dilemma for developmental choices and hence the importance of addressing the question of thermal power plant development in the region.

The next section titled “Irony” takes note of an irony, that while thermal power plants in Vidarbha are being promoted as a means of using local resources (essentially local coal) for local development, most of the proposed power plants are based on coal sourced from a long distance, and not on locally produced coal. Some possible reasons for such a situation are put forward; along with a concern that one of the reasons could be that the thermal power plants are being used as a means to grab the land and water resources of the region.

The section after this “Coal and thermal power development in Vidarbha”, presents information about existing coal mines and their production, existing thermal plants, their generation and the proposed mines and thermal power plants.

The next section presents the “Regional developmental imbalance of Vidarbha”, in comparison with other parts of the state. This discusses how Vidarbha lags behind the state in indicators such as per capita income, household expenditure, electrification, consumption of electricity for various uses, irrigation status etc. It also discusses the serious impact of pollution in areas where coal mines or power plants are already operational, the depletion of water resources, and the diversion of water from irrigation to non-irrigation use.

It also presents other impacts of coal mining and thermal power generation in the area like social and environmental costs of coal transport and of transmission lines. Lastly, it also notes one of the most serious manifestations of the developmental imbalance, namely, the suicides of farmers on a large scale in several parts of Vidarbha.

Coal-based plants need massive amounts of water, for both cooling and ash disposal

Image courtesy: Prayas

The section on “Experience of existing plants and coal mines” follows, which focuses mainly on the economic impacts of these on the local area, the investments that are likely to flow into the local area due to these projects, the employment generation and so on. As the experiences related to pollution etc. have already been discussed in the earlier section, they are not considered in this section.

The section on “Role of thermal power plants in addressing local development, balanced development” discusses the issue of whether and how, under what conditions can thermal power plants and coal mines contribute to local development and whether and how they can address the developmental imbalance.

One of the most important issues here is whether thermal power plants and coal mines are the optimal means of addressing the developmental deficit or whether other options – for example, water harvesting and agricultural development – should be prioritised over these to achieve the most effective interventions. This issue is fundamental and broader than the more specific issue of whether and how thermal power plants can contribute to the local area development. This issue is outside the scope of our note due to the constraints of time and expertise. Still, it is important enough for us to present some basic thoughts on this.

The note then moves on to its core, and lays out “A suggested approach to thermal power plants and coal mines in Vidarbha”. This section outlines how the process of planning and building new thermal power plants and mines should go ahead if it is to be effective in creating local development and addressing the imbalance. The note advocates that the first step should be to clean up – address the problems of pollution, displacement and others caused by existing plants and mines – and enshrine mechanisms to better share the benefits with the local communities. It also presents some rough estimates for the costs of such a cleanup.

It calls for a halt to construction of new plants and mines till this is done. For the new proposed projects, it advocates a process of carrying capacity studies, cumulative impact assessments along with river basin studies to determine the number of plants and mines to be built, and also recommends that the benefit sharing mechanisms be incorporated as an integral part of any new projects.

This section also emphasises, with examples and references, that these requirements (of carrying capacity studies, river basin studies, benefit sharing) are already present in various forms in Indian legal and policy regimes, and they need to be brought together in a comprehensive manner to address the issue of how to develop thermal power plants and mines. This is the only way to ensure that the projects contribute to a just, sustainable and equitable development.

The “Conclusion” summarises the findings and suggestions of the note.

The reports and the presentations can be downloaded below -