Your Power Bill Could Be Slashed As Centre Eases Pollution Norms For Coal Plants

If you're someone who flinches every time the electricity bill arrives, here's a development that might eventually ease the sting. In a move that could help bring down power tariffs, the central government has relaxed a major pollution control mandate for coal-fired power plants across India.

On July 12, the Ministry of Environment, Forest and Climate Change (MoEF&CC) announced that most coal-based thermal power plants in the country will no longer be required to install costly flue-gas desulphurisation (FGD) systems — technology used to cut sulphur dioxide (SO₂) emissions.

Here's the key change: coal power plants located outside a 10-kilometre radius of major urban centres — defined as cities with populations of over a million — are now exempt from this requirement. That's nearly 79% of India's 180 operational coal power plants.

What This Means For You

FGD systems are expensive to install and operate. Power producers have long argued that complying with the rule would hike their costs, which would then trickle down to consumers as higher electricity bills. By easing the FGD mandate for most plants, the government has effectively removed a huge financial burden from power producers. The end result? Lower production costs—and potentially lower tariffs for everyday consumers.

What About Pollution?

Sulphur dioxide from coal plants is a serious pollutant. When released into the atmosphere, it can contribute to fine particulate matter that affects air quality and public health. But a recent study by the National Environmental Engineering Research Institute (NEERI), done in partnership with NITI Aayog, paints a different picture — at least for India.

The December 2023 report found that ambient SO₂ levels at all Continuous Ambient Air Quality Monitoring Stations (CAAQMS) were well within India's permissible limit of 80 micrograms per cubic metre. It also argued that Indian coal, which contains less than 0.5% sulphur, is significantly cleaner than coal used in many other countries. Combine that with India's strong solar insolation and better atmospheric dispersion, and the report suggested that the environmental benefit of FGDs may be marginal, especially given their cost.

The Cost Factor

Installing FGD systems doesn't come cheap. The estimated cost is around ₹1.4 crore per megawatt. For the remaining 105 GW of coal capacity yet to be retrofitted, the total investment needed would be about ₹1.47 lakh crore. These costs inevitably end up in your electricity bill. The NEERI report contends that FGDs also consume more power and water and increase the carbon footprint, raising the question: Is the environmental payoff worth the price?

Where FGDs Are Still Mandatory

Plants located within 10 km of cities like Delhi, Mumbai, Kolkata, and other metros still need to toe the line. That also includes areas classified as critically polluted or non-attainment zones. For these, the Centre will take a call on a case-by-case basis, guided by expert appraisal committees.

Initially, all thermal plants near large cities were expected to install FGD systems by 2017. That deadline was pushed multiple times, and they now have until the end of 2027 to comply.

Record Power Demand

The development comes at a time when India is set to hit a record coal production. India's coal output is poised to hit 1.15 billion tonnes in FY26, up from 1.05 billion tonnes in FY25, according to CareEdge Ratings. This surge is driven by rising power demand and key policy reforms like 100% FDI in coal mining, streamlined clearances, and revamped mining laws.

These measures have boosted private participation and efficiency. Domestic coal met 82.5% of total consumption in FY25, up from 77.7% in FY21. Coal India Ltd alone contributed 74% of output, while private and captive miners also ramped up production. With stable prices and strong logistics, India’s coal sector is on a clear path toward self-reliance and affordability.

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