[Answered] Removal of restrictions on thermal power plants aims to reform India’s power sector. Examine how such policy changes can improve energy supply, benefit consumers, and ensure grid stability for economic growth.

Introduction

India’s recent policy revision on Flue Gas Desulphurisation (FGD) norms marks a pragmatic reform in the power sector, balancing environmental concerns, energy affordability, and grid stability to accelerate economic growth.

Easing of FGD Norms in Thermal Power Plants

1. The 2015 MoEFCC notification had made installation of FGDs mandatory in all coal-based thermal power plants to curb sulphur dioxide (SO₂) emissions. However, Indian coal’s naturally low sulphur content raised concerns over the scientific and economic necessity of such a blanket mandate.
2. In 2024, following extensive studies by IIT-Delhi and NEERI (commissioned by NITI Aayog and the Ministry of Power), the government issued a revised directive that classifies thermal plants into three categories: Near urban/critically polluted zones (FGD mandatory), Remote/less-polluted areas (FGD not required) and Intermediate zones (partial compliance based on local conditions).
3. This scientific recalibration has exempted around 78% of plants from FGD installation, thereby freeing up significant capital resources and avoiding an estimated ₹0.25–₹0.30/KWh tariff hike for consumers.

Implications for Energy Supply and Grid Stability

1. Cost-Effective Power Generation: The FGD relaxation avoids a cumulative capital expenditure of over ₹80,000 crore across thermal plants, which can now be diverted to modernizing old plants, improving plant load factor (PLF), and supporting expansion in renewables.
2. Grid Reliability during Transition: As India accelerates its energy transition with a renewables target of 500 GW by 2030, thermal power remains crucial to ensure baseload generation and balance the intermittency of solar and wind energy. According to the CEA, thermal plants still account for 72% of India’s total electricity generation.
3. Energy Security: India’s domestic coal is more secure and less geopolitically vulnerable than imported fuels. The move strengthens India’s energy sovereignty, especially when global supply chains face uncertainty due to geopolitical tensions.

Consumer Welfare and Affordability

1. Avoiding Tariff Shock: The FGD capex would have increased retail electricity tariffs, affecting households and industries alike. By avoiding this, the reform protects poor and middle-class consumers and ensures the competitiveness of Indian manufacturing, aligned with the Atmanirbhar Bharat mission.
2. Support for DISCOM Viability: Most distribution companies are financially strained. Cost escalations from FGDs would have further worsened their viability. The reform thus indirectly contributes to financial health of DISCOMs, crucial for uninterrupted power supply.

Environmental Sustainability Balanced with Realism

1. Although FGDs control SO₂ emissions, NEERI’s study concluded that ambient SO₂ levels are within safe limits, even without FGDs, due to India’s tropical atmospheric conditions (strong solar insolation, vertical convection).
2. FGDs themselves have a carbon footprint, especially due to limestone mining and water usage.
3. This points to a life-cycle approach to emissions, not just end-of-pipe solutions. The reform, therefore, realigns emission norms with India-specific environmental realities rather than borrowing Western benchmarks uncritically.

Strategic Alignment with Long-Term Goals

1. The policy shift complements India’s National Electricity Plan (NEP) 2023, which calls for 50% power capacity from non-fossil sources by 2030, without compromising energy access and economic productivity.
2. Furthermore, it aligns with SDG 7 (Affordable and Clean Energy) and SDG 9 (Industry, Innovation, and Infrastructure), by making power both green and accessible.

Conclusion

Revising FGD norms exemplifies India’s pragmatic energy governance—balancing environmental needs with affordability, energy security, and economic growth. Such reforms will enable a resilient, inclusive, and sustainable power sector transformation.