Will electricity bills come down? Centre eases FGD norms

New Delhi: In a significant policy shift, the Ministry of Environment, Forest and Climate Change has eased the mandatory requirement for installing flue gas desulphurisation (FGD) systems at most coal-based thermal power plants. The move is aimed at reducing electricity generation costs and aligning environmental compliance with local conditions.

Under the revised guidelines, only thermal power plants located within 10 kilometres of cities with populations exceeding one million will be required to install FGD units. Plants situated in critically polluted areas or in non-attainment cities, those that consistently fail to meet air quality standards, will be assessed individually.

The decision comes after extensive consultations and multiple independent studies and reflects a shift toward differentiated environmental regulation. Nearly 79 per cent of India's coal-fired thermal power capacity will now be exempt from mandatory FGD installation.

Experts estimate that the relaxed norms could reduce power generation costs by 25 to 30 paise per unit.

In a high-demand, cost-sensitive economy, the impact could be significant, helping state discoms contain tariffs and reducing the subsidy burden on governments.

The financial burden of mandatory FGD retrofitting was previously estimated at over Rs 2.5 lakh crore, or Rs 1.2 crore per MW, with installation timelines of up to 45 days per unit. Several power producers had warned that this would not only raise costs but also jeopardise grid stability during peak seasons.

The decision follows a series of studies by IIT Delhi, CSIR-NEERI and the National Institute of Advanced Studies (NIAS), which found that ambient sulphur dioxide levels in most parts of India are well within the National Ambient Air Quality Standards (NAAQS). Measurements across multiple cities showed sulphur dioxide levels ranging between 3 and 20 µg/m³, significantly below the NAAQS threshold of 80 µg/m³.

The studies also questioned the environmental and economic efficacy of a universal FGD mandate in the Indian context. Indian coal typically has a sulphur content of less than 0.5 per cent, and due to high stack heights and favourable meteorological conditions, dispersion of sulphur dioxide is efficient.

The NIAS study warned that retrofitting FGDs nationwide would add an estimated 69 million tonnes of carbon dioxide emissions between 2025 and 2030 due to increased limestone mining, transportation, and power consumption.

FGDs are useful in places with high sulphur coal (like in China or the US), high ambient sulphur dioxide levels and dense urban proximity. Studies show that India does not face these problems at scale, making universal FGD rollout unnecessary, expensive and counterproductive.

Industry executives welcomed the decision. "This is a rational, science-based move that avoids unnecessary costs and focuses regulation where it is most needed,” said a senior executive at a leading public sector utility. “More importantly, it will help keep electricity affordable."

Officials stressed that the government remains committed to environmental protection, but with a smarter lens. "This is not a rollback. It is a recalibration based on evidence," a senior official said.

"Our approach is now targeted, efficient and climate-conscious," the official added.

An affidavit incorporating these findings will be submitted shortly to the Supreme Court in the MC Mehta vs Union of India case, where FGD enforcement timelines have been under judicial scrutiny. IANS