Endangered Waters - Greenpeace

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Endangered Waters Greenpeace India 55 06 Risks for investors and national energy security “Growing competition for scarce water resources is a growing business risk, a major economic threat, and a challenge for the sustainability of communities and the ecosystems upon which they rely.” 2030 Water Resources Group 57 “We strongly believe that investors can no longer ignore environmental and water related issues, as they have tended to do in the past.” HSBC 58 Conflicts over water have already had a material effect on the operations of several coal-fired power plants in India. More instances are likely to arise in the future as water resources become increasingly valuable. Financial impact to the operators of a coal-fired power plant can arise through: • Low water availability, reducing plant output • Water allocation issues delaying or stopping a plant • Increased capital costs through water supply and treatment systems and lowerwater-use technologies (such as dry cooling and increased water recycling) • Increased operating costs, for example by requiring treatment of low-quality water sources and possibly higher water prices • Reduced project operation or life due to water conflict and regulatory intervention. 6.1 Physical water risk In 2010, all units of the 2,340 MW Chandrapur Super Thermal Power Station were forced to close for three months due to a lack of water, leading to increased power outages across the state of Maharashtra. 59 HSBC concluded that this was not a one-off issue, stating, “We strongly believe that investors can no longer ignore environmental and water related issues, as they have tended to do in the past”. 60 The ongoing nature of the problem was demonstrated in 2012 with further power plant shutdowns due to water scarcity. In April, four 210 MW units of the 1470 MW Raichur Thermal Power Station in Northern Karnataka was forced to shut down for several days 61 while it waited for water to be provided from reservoirs, leading to extended power cuts. Police were deployed along the canals to prevent farmers from drawing the water intended for the power station. 62 In May, a 250 MW unit at the Paras Thermal Power Station in Akola was shut down for several days due to low water levels in the Mun River. 63 HSBC found that coal projects in several Indian states faced significant earnings risks due to water scarcity, with the risks highest during summer months. 64 A 2010 analysis found that each 5% drop in a coal-fired power plant’s load factor will result in nearly a 75 basis point drop in the project internal rate of return (IRR). 65 HSBC’s sensitivity analysis of water risks found that these could knock up to 5% off earnings in the 2013 financial year across the sector of publicly-listed power companies. 66 Some companies were found to be more at risk than others, with NTPC and CESC significantly exposed. Modeling of the Wardha River Basin by IIT Delhi, commissioned by Greenpeace, shows water risks for power stations increasing in this region (see section 4). The modeling indicated that the annual mean flow of the river Wardha will reduce to 1,419.42 MCM if all planned reservoirs are put in place, even
Endangered Waters Greenpeace India 56 Farmers listen at a gathering in Rohana village, Bhandara district, Maharashtra before accounting for the water requirements of thermal power plants. Considering inter-annual variation of the flow of the river, which was simulated to vary from a low of 229 MCM to a high of 5,684 MCM in the future condition, it was seen that at least four of the years modeled had annual flows for the entire Wardha river that were less than the volume required by the additional power stations planned (552.52 MCM). Years like these would see conflicting interests competing for the available water resources. The IIT Delhi modeling also indicated that surplus water is only available in Wardha for two or three months (during monsoon), and that the first six months of each year can have very little flow. To ensure continuous water supply for the planned thermal power plants, significant additional investment could be needed for large storage reservoirs. Figure 8: Annual mean flow of river Wardha including future reservoirs 6000 5000 Yearly volume Volume required by additional coal-fired power station planned 4000 Volume in MCM 3000 2000 1000 0 1970 1972 1974 1976 1978 1980 1982 1984 1986 1988 1990 1992 1994 1996 1998 2000 2002 2004
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Contents List of tables List of fig
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Page 22 and 23: Figure 4: Proposed and approved the
Page 27 and 28: Leaks in pipelines carrying fly ash
Page 35 and 36: A farmer in Ghuikhed village, Amrav
Page 56 and 57: 1 2 4 5 6 8 9
Page 63 and 64: The Dali Zhemoshan Wind Farm is Yun
Page 75 and 76: Nigahi coal mine, India’s largest
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Endangered Waters - Greenpeace

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