Lighten the Pollution Burden of Thermal Power States

Learn about thermal power production, its working principles, fuel sources, environmental impact, and role in global energy generation. Explore advancements in efficiency and sustainability.

Table of Contents

Context: Despite the commitments to update Nationally Determined Contribution (NDC) under the Paris Agreement to the UNFCCC in August 2022, thermal power plants remain a significant source of electricity in India.

Key Commitments in India’s Updated NDC

Adopting a climate-friendly and cleaner path to economic development
Reducing emissions intensity of GDP by 45% by 2030 (compared to 2005 levels)
Achieving 50% cumulative installed electric power capacity from non-fossil fuel sources by 2030.
Creating a carbon sink of 2.5–3 billion tonnes of co₂ equivalent by 2030
Enhancing energy efficiency and promoting sustainable lifestyles (Mission LiFE)
Better adapt to climate change by enhancing investments in development programs.
Mobilize domestic and new funds from developed countries.
Build capacities, and create domestic framework and international architecture for quick diffusion of climate technology.

Thermal Power Production: Disproportionate Pollution Burden

High Dependence on Thermal Power: Thermal power (mainly coal-based) contributes significantly to India’s electricity generation, leading to high carbon emissions.
- Eg., India accounts for 20,794.36 kg of carbon emissions from electricity generation.
Dominant share of coal: Approximately 59.12% of the total energy supply in India comes from coal. In 2022-23, about 73.08% of electricity was generated from coal, while only 1.48% came from oil and natural gas.
Disparities in Electricity Production and Consumption: Some States (e.g., Chhattisgarh, Odisha, Jharkhand) produce more power than they consume, while others (e.g., Gujarat, Maharashtra) import power.
Uneven distribution of pollution: States that produce thermal power bear a disproportionate pollution burden compared to those that consume it.

Facts

India has a total installed capacity of 2,37,268.91 MW by thermal power plants.
Key thermal power producing states: Maharashtra (31,510.08 MW), Uttar Pradesh (26,729.374 MW), and Gujarat (26,073.41 MW) had the highest non-renewable electricity generation capacities in 2022-23.
Highest share of thermal power: Tripura (96.96%), followed by Bihar (95.57%), Chhattisgarh (94.35%), Jharkhand (92.69%), Delhi (87.96%), West Bengal (87.72%), and Uttar Pradesh (81.84%).
Net electricity sellers: Chhattisgarh is the highest net seller of electricity (535.29 MW), followed by Madhya Pradesh (379.19 MW), Himachal Pradesh (153.43 MW), Rajasthan (135.14 MW), Odisha (95.40 MW) and Meghalaya (55.22 MW) in 2022-23.
Net electricity importers: Gujarat is the highest importer of electricity (528.17 MW), followed by Haryana (212.63 MW), Maharashtra (187.50 MW), Delhi (162.97 MW), Punjab (160.82 MW), and Tamil Nadu (128.37 MW) in 2022-23.

Lack of Compensation for Pollution Burden

Constitutional constraints: States can tax electricity consumption and sale but not generation, while the central government does not impose a specific tax on electricity production.
GST exemption: Electricity as a commodity is exempt from the Goods and Services Tax (GST), and services related to its transmission or distribution are also GST-exempt.

Proposed Solutions for Compensation

Taxing thermal power generation: Allowing States where central sector power plants are located to tax thermal power generation, or the Union government can collect and transfer the generation tax to the producing States.
Compensation through the Finance Commission: Utilizing the Finance Commission of India to develop a fiscal road map that compensates thermal power-producing States for the burden of other States’ electricity consumption