Environmental Issues in the Power Sector : Long-Term Impacts and Policy Options for Karnataka
This study of the long-term environmental impacts and policy options for power sector development in Karnataka, is one of a series undertaken by the Bank, in cooperation with the Government of India and state governments. It is a follow-up to the b...
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| Format: | ESMAP Paper |
| Language: | English en_US |
| Published: |
Washington, DC
2014
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| Online Access: | http://documents.worldbank.org/curated/en/2004/10/6039568/environmental-issues-power-sector-long-term-impacts-policy-options-karnataka http://hdl.handle.net/10986/18083 |
| Summary: | This study of the long-term
environmental impacts and policy options for power sector
development in Karnataka, is one of a series undertaken by
the Bank, in cooperation with the Government of India and
state governments. It is a follow-up to the broader study
Environmental Issues in the Power Sector (EIPS) (ESMAP/World
Bank 1998), and the general methodology developed for EIPS,
is used for this analysis. The study begins by evaluating
the impacts of the baseline reform scenario, and then
perturbs this scenario for the options examined, including a
scenario of "stalled reform," to enable assessment
of the costs and benefits of reform. Because Karnataka has
already implemented significant reform measures, "no
reform" (as used in the original 1998 EIPS study) is
not a useful scenario. The critical insight of this study is
that the damage costs of emissions from grid-based fossil
plants are between one and two orders of magnitude smaller
than those of captive and self-generation units, emissions
from which are essentially uncontrolled, and occur in more
populated areas at, or near ground level. The report
addresses the coal-by-wire option, which would shift from
Karnataka to the producing states the environmental impacts
that are associated with coal generation. It may well be
that the producing states will as a result, have to impose
much higher coal royalties, and, it is also likely that
coal-producing areas would encounter water resource
constraints: while Karnataka is a drought-prone state for
which the opportunity costs of consumptive use are higher
than in the eastern states of Bihar and Orissa, it is
unclear if mine-mouth projects in those states could serve
the bulk of the power needs of both southern, and northern
India in the decade 2010-2020. The study highlights that
power sector reform is the single most important step that
may be taken to mitigate the environmental impacts of the
power sector, while tariff reform is the second most
important policy option for environmental sustainability,
with demand-side management being a win-win factor.
Consumptive water use for thermal generation is a major
issue in Karnataka. Gas combined-cycle combustion turbines,
which are attractive for their relatively low air emissions,
consume only one third of the water that a steam-cycle
project uses. The use of imported coal would be a viable
option for Karnataka, if the existing customs duty on
imported coal were to be removed. This study shows that the
probable capital cost decreases for wind power, would still
permit an acceptable rate of return for developers, but that
the pace of new projects may slow as only the best sites
will warrant development under the new tariff. |
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