Environmental regulatory compliance
For the year ending 31 December 2017, there were no environmental non-compliance incidents resulting in fines or prosecution at any of our operating sites. In 2016, some environmental and forestry land damages occurred relating to the construction of the Sandu I Windfarm in Guizhou province. All site environment restoration and seasonal revegetation works were completed in 2017.
In 2017, there were 13 licence limit exceedances for particulate emissions at Jhajjar in India, which were minor incidents that did not result in any penalties. This was related to the significantly greater use of Jhajjar during the year and overall, Jhajjar has reduced its particulate matter emissions per unit of electricity sent out.
Key emerging environmental regulations
We carefully track emerging environmental regulations in order to prepare for compliance as far ahead of time as possible.
In May 2017, National Ministry of Environmental Protection and National Development and Reform Committee (NDRC) jointly released the “Guideline on Designation of Ecological Protection Zone”, requiring all provinces finalise their provincial ecological zoning plan by the end of 2018, which controls project development in the designated Protection Zone. We have assessed potential impacts across our asset base and formulated an action plan to monitor the development of provincial ecological zoning plans.
An emerging issue in Australia relates to the legacy use of a group of manufactured chemicals called perfluorooctane sulfonic acid (PFOS) and types of per- and polyfluorinated alkyl substances (PFAS). In October 2017 the Federal Government released a Regulation Impact Statement on options for a national phase out of PFOS, as Australia is party to the Stockholm Convention but has not yet ratified. Draft National standards for the management of PFAS have been finalised but are not yet incorporated into State legislation. The State environmental regulators have provided guidance on the use of the draft PFOS standards, recommending their immediate application. EnergyAustralia is currently assessing the extent and risk profile of PFAS impacts at our sites.
The Victorian State Government amended its coal mine rehabilitation bond policy in July 2017, increasing Yallourn’s rehabilitation bond from A$11.4 million to A$148 million.
A set of new statutory limits applicable to coal-fired power plants in India have been announced in a phased manner, with Jhajjar being expected to operate fully using the flue gas desulphurisation (FGD) units with effect from 31 January 2019. The new limits cover particulates, nitrogen oxides, sulphur dioxide, and mercury. There is also a water use intensity requirement. Jhajjar is already equipped with environmental control systems to comply with most of these limits, and a cross functional team has been formed to prepare Jhajjar for meeting these new requirements before the deadline.
International and national standards
We monitor developments in key environmental standards to ensure we are well prepared for full compliance with local and international laws when they become effective.
China’s environmental protection tax law has taken effect from 1 January 2018. Environmental protection taxes are levied on air pollutants, water pollutants, solid waste and noise, replacing pollution discharge fees which have been introduced for about 40 years. Corresponding tax rates are being finalised by respective provincial government.
For both phases of Fangchenggang, achieving the ultra-low emission requirement in 2018, we do not anticipate any significant impact to our operations.
India tightened emission and water usage norms for thermal power plants. Accordingly to these recent changes, our Jhajjar power plant needs to ensure that our PM, NOx, SO2 and Mercury emissions do not exceed 50, 300, 200 and 0.03 mg/Nm3 respectively, while water consumption needs to be below 3.5 m3/MWh for Jhajjar power plant.
Although the Central Pollution Control Board (CPCB) has granted us time until 31 January 2019 and 31 December 2019 to meet requirements of SO2 and NOx respectively, we are already meeting the requirements related to PM, mercury and water. We are also meeting NOx requirements most of the time during our operations. Our ability to comply with these new norms immediately is the outcome of our approach to choose efficient and environment friendly technologies such as super critical technology, Flue Gas Desulphurisation (FGD) unit, low NOx burners and high quality Electro-Static Precipitators (ESP).
To further improve our environmental performance and avoid any instances of non-compliance, we are implementing a combustion optimisation solution and overhauling the FGD system, with the expectation that this will be completed during 2018.
The Victorian State Government legislated a Victorian Renewable Energy Target in October 2017. This requires 25% of Victoria’s generation be sourced from renewable energy by 2020, and 40% by 2025. If met the target will lead to a significant increase in renewable energy, challenging the financial future of Yallourn and subsequently challenging Victorian energy reliability, whilst placing upwards pressure on electricity prices. The Emissions Reduction Fund, the Safeguard Mechanism and the Renewable Energy Target continue to operate as mechanisms to reduce Australia’s emissions, while consideration of an alternate national policy the “National Energy Guarantee” (NEG) is underway. The NEG is designed to reduce emission in the electricity sector, whilst guaranteeing a level of reliability and would be a key policy to enable Australia to meet its international climate change commitment of a 26-28% reduction in emissions by 2030 from 2005 levels.