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LATEST NEWS UPDATES | Land grab projects? by Lyla Bavadam

Land grab projects? by Lyla Bavadam

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published Published on Nov 16, 2011   modified Modified on Nov 16, 2011

An independent study says some 250 thermal power projects that have got clearances may be meant just to grab land and water resources.

THERE have been a growing number of headlines that speak of an energy crisis and the energy deficit in India in the last few years. The disparities in the demand-supply scenario, the increasing prospects of disruptions in the global supply of fuel and the consequent results of higher import bills, the problems of losses during transmission and distribution and a host of other issues have been debated.

The public sector monopoly over this sector has been blamed for the energy crisis. So, after liberalisation, when the sector was thrown open to private investors, it was generally considered to be a profitable business opportunity. In fact, more than 250 companies have applied for and received environmental clearances to set up thermal power projects in the coming years. In the generally accepted analysis of the energy situation, this seems to be a good thing. But there is another side to the story.

For quite some time there has been talk of a vast number of thermal power projects coming up all over the country, but apart from certain regions, such as the Konkan (Frontline, February 11), where details were available, there was no central database that provided information on the rest. Prayas Energy Group, a non-governmental, non-profit organisation that works on the theoretical, conceptual and policy issues in the energy sector, was curious about the widespread talk about big projects and decided to find out more. (It is worth noting that Prayas was instrumental in the analysis of the infamous power purchase agreement of the Dabhol Power Company.)

Girish Sant of Prayas said he and his colleagues decided to start off by looking at the website of the Ministry of Environment and Forests (MoEF) since the Ministry played a part in issuing clearances. Here they found a bulk of information that confirmed much of what they had been hearing. The information was appalling enough for lead authors Shripad Dharmadhikary and Shantanu Dixit of Prayas to dig deeper and publish a report.

“Thermal Power Plants on the Anvil: Implications and Need for Rationalisation” starts with a seemingly straightforward announcement: “A massive expansion of the thermal power generation capacity of the country is on the anvil.” Without much ado, the report then drops the bombshell that the MoEF has liberally granted environmental clearances to about 250 coal- and gas-based thermal power projects that will produce a total of 192,913 MW of power – a proposed capacity that far exceeds the country's projected requirement until 2032! Delving further, they were shocked to discover that there were more projects, yet to be cleared, with the potential to produce, totally, 508,907 MW.

Simple calculations showed the following. As of April, the existing total installed electricity generation capacity in India was 174,361 MW. Of this, the total thermal capacity was 113,000 MW. The green signal from the MoEF for the new plants will result in a capacity increase of about 192,913 MW from coal- and gas-based plants. The pending projects are likely to get clearance because in the last four years the MoEF has made it a point to clear all thermal power proposals.

This means that in the coming years the country can expect to see plants with around 701,820 MW being built. And this is only in the thermal power sector. Coal-based plants account for about 87 per cent of these plants in-waiting. The report says, “These additions are more than six times the currently installed thermal capacity of 113,000 MW. They are also three times the capacity addition that would be required to meet the needs of the high-renewables-high efficiency scenario for the year 2032 projected by the Planning Commission Integrated Energy Policy report.”

With this basic information in hand, the MoEF's green signal seemed all the more baffling. It could be argued that this was strategic future planning, but there was something about the clearing of the capacity of a mammoth 192,913 MW of power that held the attention of the authors. Coming up against bureaucratic roadblocks, they filed a Right to Information (RTI) plea addressed to the Environment Impact Assessment Centre of the MoEF, asking how so many thermal power projects were given clearance. The response said that if the site of a project was not found to be appropriate the promoters were asked to change it. Thus, in effect, a project was never rejected – merely asked to change location.

The MoEF, for its part, reiterated that environmental clearances were given after the Ministry was satisfied that environmental planning was part of the future projects.

Studying the issue even more closely, the researchers came to a conclusion that may seem anti-development, but, when studied closely, makes a strong argument for itself. They concluded that “with large areas of land being acquired for these projects, and water being allocated for these unnecessary plants, this may turn out to be a land and water grab story.” They noted that the clearing of so many gigantic projects “indicates a complete disconnect between the government's actions in the power sector and the actual power needs of the country”.

The location of the projects were also suspect, the authors found. Out of a total of 626 districts in the country, it is inexplicable why the projects are being sited in only 30 (4.7 per cent of the total number of districts). Fifteen districts have plants with capacities totalling 10,000 MW or more each. And several districts are contiguous, which will increase the impact of the plants.

The Central and State sectors have about 82 per cent share in the existing thermal power plants. But the private sector accounts for 67 per cent of the proposed projects. So intense is the corporate interest that 10 private companies account for 160,000 MW of the total mega wattage. Among the 10 are Reliance, Adani, Welspun, Essar, Indiabulls, Tata Power and Vedanta. Attempts to contact Reliance and Tata Power, the two largest investors in the list, proved fruitless.

It is now not uncommon for large corporations to buy up vast tracts of land. Some years ago a prominent real estate dealer of Mumbai told this correspondent that he had been instructed by his client, one of the country's largest corporations, to buy land anywhere in India as long as it was over 10 acres (one acre is 0.4 hectare) and had a water source. Knowing that land would be the most valuable commodity in the future, the company wanted to hold the aces at the appropriate time. Interestingly, the company in question is one of the top 10 on the list of corporates wanting to set up thermal power plants.

The allocation of land, coal and water is a major concern. The report argues: “These projects in the pipeline represent a massive overcapacity in the making. Thus, valuable and scarce natural resources of land, water, gas and coal will be allocated to projects that are ultimately not required.”

Land for such gigantic projects is invariably acquired forcibly with the government applying the Land Acquisition Act citing public purpose. The authors wryly say, “Given that the thermal capacity in pipeline is far in excess of that required, it is clear that many of these plants will not serve a public purpose. Hence, the use of the Act to acquire land for such plants cannot be justified.” The current Act is so structured that there is no provision to return the land once acquired to the original owner even if the project does not materialise. In such a case, the promoters can use the land for their own profit. The researchers say, “Some of the plants may even be promoted primarily to obtain such benefits.”

Almost 85 per cent of the projects in the pipeline are coal-based. A large proportion of them rely on domestic coal which is in short supply – even existing power plants do not get their full requirement. Obviously, supplying new plants will spread the resource even thinner, ultimately resulting in coal imports. No study has been done about the coal reserves in the country.

Sant told Frontline that there were about 20 to 40 giga tonnes of coal reserves but their location was not clear. If they are in forest reserves, then they are in a no-go area for mining. He said that if the reserves were no more than 40 giga tonnes, the coal would run out by 2030. Clearly, there has been a lacuna in planning; these proposed projects are mere ghosts and the actual aim is to grab land and water resources. There is also a health issue involved – Indian coal is very high in mercury content. Currently there are no limits set for mercury emissions from power plants, though this can have grave consequences for the brain, the heart, kidneys, lungs and the immune system.

Allocation of water rights is the other contentious issue. Coal plants are notorious for using as much as four litres of water per kWh of generation. About 72 per cent of the cleared plants are inland and about half of these are in the river basins of the Ganga, the Godavari, the Mahanadi and the Brahmani. Even presuming that a river basin can supply the needs of the thermal power plant, it is not acceptable because it would most likely be eating into the water share of the local populace. And given the vagaries of the weather, there will invariably be conflict in times of drought. Who then gets priority – the power plant or the local people? Past experience with the privatisation of water, as in the Sheonath river case in Madhya Pradesh, has shown that priority is invariably given to corporate interests.

The report “estimates that the consumptive water needs of the plants with Environmental Clearance Granted will themselves be close to 4.6 billion cubic metres per year. In these circumstances, several water conflicts appear to be in the making.” Here, too, there is an example from the past. Neither the industry nor local people will benefit if water supply stops as had happened in April last year in Chandrapur district where the Maharashtra State Electricity Board had to shut down its plant on account of water shortage. Ironically, Chandrapur is slated to have plants with a total capacity of 8,000 MW.

Again, using a thumb rule from the Central Electricity Authority, Prayas estimates that coal-based plants consume about 3.92 million cubic metres of water per 100 MW per annum. There are such plants for 117,500 MW inland. This means these plants will require about 4,608 million cubic metres of water. That is enough to “irrigate about 920,000 ha of land in a year or provide drinking and domestic use water to about 84 million people or 7 per cent of India's population every day for a year”, the report says.

In 2009, the MoEF used the Comprehensive Environmental Pollution Index and identified some areas in the country as “critically polluted”. Shockingly, a total capacity of 88,000 MW of the proposed thermal projects is located within or near these Critically Polluted areas. Coal-based thermal power plants are infamous for sulphur dioxide emissions, coal ash disposal issues and the release of toxins such as mercury, arsenic, lead and cadmium. Even if there are regulations (in the case of sulphur dioxide, these are not even clear) it is doubtful whether the air and water supply will be able to dispose and disperse the mammoth emissions. In the past, dykes of ash ponds have collapsed resulting in ash slurry inundating areas. But even stored coal ash is hazardous because it affects ground and surface water supply as well as ambient air.

Playing the devil's advocate, Prayas argues that the delicensing of thermal power generation will automatically mean that market forces will “weed out excess and inefficient capacity”. In other words, even if plants have got the clearance and resources are allocated to them, they will be governed by the market. While this may be so, it does not take away from the crucial fact that companies may already have got what they wanted – land and water. And, they would have got all this with subsidies. They will have profited even if the plants fail. The real victims will be those who have been displaced for a worthless project, the taxpayers whose money was misused, the environment, and, of course, the country as a whole.

Prayas has called for revamping the clearance process, a moratorium on new clearances, and improved coordination between the different agencies involved. It further recommends that “from the 200,000 MW that have already been given environmental clearance, projects with very high social and environmental impacts, projects that do not have broad local acceptance, and projects leading to sub-optimal use of transmission, fuel, land and water should be put on hold” and a reassessment be made of the long-term demand for power.

Using already available information and that obtained through RTI, Dharmadhikary and Dixit try to prove that the thermal power projects in the pipeline are clearly “a massive overcapacity in the making”. They say this leads to the conclusion that there is an ulterior motive: that of reserving vast expanses of land for future profit.

Frontline, Volume 28, Issue 24, 19 November-2 December, 2011, http://www.frontline.in/stories/20111202282411000.htm


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