Power Sector Report-Final
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THOUGHT ARBITRAGE Bridging the thought divide Kshama V Kaushik Power Thought Arbitrage Research Institute C-16, Qutab Institutional Area to the New Delhi 110016 Tel: 011 41022447; 41022448 Email: [email protected] Website: www.tari.co.in Planet TERI-Business Council for Sustainable Development (BCSD) The Energy and Resources Institute (TERI) Core 6C, Darbari Seth Block, Habitat Place Sustainability Disclosures India Habitat Center, Lodhi Road New Delhi - 110003 by the Indian Power Sector Tel: (+91 11) 24682100; 41504900 Fax: (+91 11) 24682144 and 24682145 Email: [email protected] PROJECT PARTNERS CLP India CLP India is a wholly owned subsidiary of the CLP Group, which is listed on the Hong Stock Exchange and is one of the largest investor-owned power businesses in Asia. CLP India is one of the largest foreign investors in the Indian power sector with a total committed investment of over INR 12,000 Crores. This investment is spread across a diversified and TERI BCSD environment friendly generation por tfolio that covers renewable energy, With a vision to create a synergy for supercritical coal and gas fired the corporate sector as a whole to generation, amounting to 2,947 MW. THOUGHT move towards sustainability, TERI- ARBITRAGE It's been operating a 655 MW gas fired Bridging the thought divide BCSD (Business Council for Sustainable Development) was set up power plant in Bharuch, Gujarat, since Thought Arbitrage Research by The Energy and Resources Institute 2002. This plant has achieved NOSA 5- Institute (TERI) in 2001. It has now evolved into Star accreditation for complying with a strong industr y body , with the highest level of inter nationally Thought Arbitrage Research Institute membership from diverse sectors, accepted safety standards and is 1SO (TARI) is a not-for-profit organisation including public sector undertakings, 14001 certified, complying with the set up under Section 25 of the Indian multinationals, and private companies highest standards in environment Companies Act, 1956. TARI’s mandate from across India. They work towards conservation. The plant was recently is to develop intellectual capital for the evangelizing business sustainability awarded the status of a “NOSCAR” country in the areas of corporate through industry specific initiatives that company-which is the ultimate governance, sustainability and public provide a platform for knowledge, recognition of excellence in policy. learning and encourage sharing of best occupational risk management. The practices. It is also the Indian partner company is also building a 1,320 MW TARI works with the Indian of the WBCSD (World Business Council supercritical coal-fired power plant in government, regulators, multilateral for Sustainable Development), Geneva. Jhajjar, Haryana. Both the units of this agencies, standard setting bodies, plant have been successfully various businesses and trade TERI-BCSD India member company synchronized and the first 660 MW unit organisations both in India and representatives identify, conceptualize of the Jhajjar Power Planthas achieved overseas to put together independent and implement projects in partnership Commercial Operation Date (COD). research and thought papers. Our with researchers at TERI and the research output is based on structure of the business council In line with the CLP Group's quantitative and empirical analysis reflects this partnership. TERI provides commitment to developing 20% of its which is supplemented by qualitative research and implementation support generating capacity from non-carbon interventions for holistic outcomes. to the business council and acts as the emitting energy sources such as Some of the thought papers and permanent technical resource for renewable energy and nuclear power articles can be accessed at various theme specific action oriented by 2020, CLP India is one of the largest www.tari.co.in projects, knowledge papers, seminars wind power developers in India with over 970MW of committed wind and capacity building workshops. 1 TARI is an Organisational Stakeholder Membership is by invitation only. For projects – over 400MW of this capacity of Global Reporting Initiative (GRI) and more information please visit is already commissioned and the rest GRI’s Certified Training Partner in India. www.teriin.org/bcsd. is in various stages of development. Power to the Planet Sustainability Disclosures by the Indian Power Sector CONTENTS Analysis of Sustainability Disclosures by Indian 29 Power Companies Type of Reporting Analysis of Disclosures of the Single Company with Separate Sustainability Report Sustainability Matters Reported by Companies in the Sample Risks and Opportunities Identified and Methods of Mitigating These Risks Governance, Commitments & Engagement and Corruption Foreword 5 Commitment to the Environment and Conservation of Energy and Efficient Technologies Executive Summary 7 Training and Education Improvement of Livelihood, Rehabilitation and Introduction 11 Resettlement of Project Affected People What is Sustainability Reporting? About this Study Thermal Power Plants and Environment 37 Introduction to the Power Sector Fly Ash and its Gainful Utilisation in an Eco-Friendly Manner Background of the Energy Sector in India and the 15 Uses of Fly Ash Ministry of Power Ash Generation and Utilisation in 2010-11 Energy Requirement & Demand Modes of Utilisation of Fly Ash Structure of the Power Sector Disclosures in Target Companies International Cooperation and International Climate Change Negotiations Global Power Utilities 41 Other Activities of the Ministry of Power Towards Basis of Selection Sustainable Development Profile of Global Companies Type of Reporting Legal Framework & History 19 Risks Reported by Companies in the Sample Risks identified by companies Sustainability reporting requirements for the power 23 Risks specific to nuclear power sector in India Disclosures Related to Fly Ash and its Disposal Environment Impact Assessment Hydropower Sustainability Assessment Protocol Business Responsibility Reports—How ready 47 (“Protocol”) are power companies? Business Responsibility Report and National Voluntary Guidelines Way Forward 51 UN Global Compact and CoP filing Information Needs Carbon Disclosure Project (CDP) Role of Stakeholders GRI Framework Industry Commitment Impact on Sustainability Due to the Rapid Growth of Companies Selected for Review 27 the Power Sector Power to the Planet Sustainability Disclosures by the Indian Power Sector FOREWORD indicators for determining the most material and comprehensive sustainability reports. It became evident from the analysis that Indian power companies need to disclose sustainability data relevant to key stakeholders in the corporation–not just economic stake holders, but also customers, employees, communities, suppliers, and above all the environment. Transparency in data disclosures by industry players The power sector is one of the largest consumers of finite would be critical in their business performance making resources and also forms the fundamental input in any them more responsive to global challenges and the growth economy. Our conviction is that emerging demands of the society. improved disclosure of sustainability data in India is both necessary and urgent We believe this study provides new insights into the reporting must be mandatory, albeit with a progressive materiality of sustainability issues for power companies in level of maturity over a defined time frame, and India in its journey towards disclosure, transparency and better guidance would enable companies rise to the good management. As such, it is useful not only for challenge of sustainability reporting, and see its regulatory or standards-setting bodies, but for corporations benefits in business rather than as a burden of working to put processes in place to manage risks and compliance. opportunities associated with non-financial issues facing the power sector. With the above as raison d’etre, we took this maiden endeavour to look beyond the obvious in state of We recognize that the task at hand is challenging. What reporting/disclosures by business in India, and with an exactly will be the outcome of this study toward mandatory active support of CLP Power, started with the power sustainability disclosure in India and beyond may not be industry. We also wanted to understand and possibly entirely clear today, but we hope that the ideas brought provide sufficient inspiration to Indian power companies to forward in this paper can contribute to that important move from a compliance driven “disclosure” approach to debate. one of managing, and even competing on, sustainability issues that are important for business continuity and We thank our project partner Thought Arbitrage Research profitable growth. Institute for this report and look forward to bringing out more specialized sector reports in the months ahead. We also recognize that it is difficult to ascertain what data will constitute comprehensive, information on how actions of corporations affect lives of the community in which they operate and what measures should corporations adopt to ensure sustainability or improved quality of goods and level of services in future years. In the absence of specific guidelines, companies adopt commonly used reporting formats in varying degrees of detail. Meanwhile, the Indian Dipankar Sanyal 5 government's new National Voluntary Guidelines have set CEO, TERI-Business Council for Sustainable Development out its own list of principles, core elements and key The