UNFCC approves controversial Reliance power project in Jharkhand
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UNFCC approves controversial Reliance power project in Jharkhand

The CDM Executive Board has approved two controversial Indian mega projects: a new coal fired power plant and a hydro power plant which had recently made headlines because of its non‐additionality and the harm reportedly caused to the local population.

The CDM Executive Board once again ignored criticism of the environmental integrity of coal projects by approving yet another supercritical coal project. The project is part of Reliance Power Ltd, owned by Anil Ambani. Over the next 10 years the plant will receive 21 million CDM (Clean Development Mechanism) credits while emitting 240 million tons of CO2.

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Jharkhand Integrated Power Ltd, a 100 per cent owned subsidiary of Reliance Power Ltd, is implementing a 3,960 MW project activity using ‘higher efficiency super-critical technology’, near Tilaiya village in Hazaribagh district of Jharkhand.

In order to qualify as a CDM project, a project developer must show that the project would not have used supercritical technology without CDM support. The newly registered project failed to do so because the Government of India has required by law that this project use supercritical technology. Moreover, because of skyrocketing coal prices and severe shortages, power producers are increasingly switching to supercritical technology regardless of CDM support.

Steven Herz of Sierra Club, who has independently evaluated a number of Indian coal projects seeking CDM registration, said, “This is not a project that slipped through the cracks of the CDM review process. The CDM Executive Board was well aware of these fundamental problems and closely reviewed the project. Their decision to approve the project anyway raises serious questions about their willingness to enforce CDM rules in an objective matter.”

This statement is supported by Reliance’s annual report to its shareholders that explicitly states that the CDM is a “new revenue stream for the company,” making it clear that CDM support is not necessary to finance the project.

Jharkhand Integrated Power Ltd, a 100 per cent owned subsidiary of Reliance Power Ltd, is implementing a 3,960 MW project activity using ‘higher efficiency super-critical technology’, near Tilaiya village in Hazaribagh district of Jharkhand. Six plants of 660 MW each will be deployed as a part of the project activity.

“This is a remarkably poor use of CDM resources. This project will fill the coffers of a billionaire while emitting massive quantities of carbon dioxide and other air pollutants. It not only undermines the goal of addressing climate change, but also completely fails to support sustainable development in India,” said Anja Kollmuss from CDM Watch.

The same criticism also holds true for the second project – the 412 MW Rampur Hydroelectric Project located near Rampur in Himachal Pradesh. The project has long faced criticism about its additionality claim and stiff local opposition as a result of its lack of public consultation and failure to deliver sustainability benefits. Satluj Jal Vidyut Nigam Limited (SJVN), a hydropower company originally created by the World Bank, signed an agreement with the state government to implement the project back in 2004. The Indian Prime Minister laid the foundation stone in 2005. The World Bank approved a major loan for Rampur in 2007. This project would clearly have gone forward with or without the support of the CDM.

Himanshu Thakkar of the South Asia Network on Dams, Rivers & People (SANDRP) said, “It is pretty shocking to see that Rampur project has been registered. This shows how inadequate, poor and weak are the capacity, will and intention of the UNFCCC to enforce the criteria that the Executive Board is supposed to enforce. Most fundamentally, the project is non-additional as proved by the official documents that we provided to UNFCCC in our comments filed with UNFCCC in June 2009 when the project’s Design Document was put up for validation.

“Again when the project was put up for registration in May 2011, we wrote a detailed letter to UNFCCC showing how the validation report was giving wrong and misleading information and was also changing basic aspects from comments phase to registration phase. The validation report in fact had failed to respond to the comments from the local Himachal Pradesh groups. Our letter to the Designated Operating Entity on June 1, 2011 and to the members of the Executive Board of the UNFCCC on June 8, 2011 remains unanswered. The Executive Board members requested review of the registration on June 14, 2011, but the grounds of the request were so inadequate and weak that it raises the question if the members were serious or were going through the motions to show that they are doing something.”

“The Rampur project is the latest example of an Indian project that undermines the credibility of the CDM. Now that the project has been registered, it will increase global CO2 emissions, at a cost of €120 million to unsuspecting energy consumers in Sweden,” said Katy Yan from International Rivers.

Said Thakkar, “The whole episode raises suspicion that the UNFCCC board is being pushed into registering such unjustified projects by powerful elements like the World Bank and the Government of India, or is there also corruption involved, considering the large sums of money involved (Rampur project claims that it will get 14.1 million Carbon Emission Reduction Credits, which is equivalent to over 141 million Euros). It also shows how poor is the role of the Designated National Entity, namely the Indian Ministry of Environment and Forests in certifying that the project is a sustainable development project, when the project has such huge social and environmental impacts and also its track record has been so poor.”

A diplomatic cable from 2008 published last month by WikiLeaks provides additional evidence that most CDM projects in India are non‐additional. Asked about the allegations Martin Hession, chair of the CDM Executive Board said in an interview with Nature that “the CDM is much more transparent and predictable than the tenor of these remarks might suggest.”

“The CDM too frequently promotes projects that neither cause additional emission reductions nor support sustainable development,” said Eva Filzmoser from CDM Watch, “facing criticism that decisions by the CDM Executive Board are often tainted by conflicts of interests, we are asking the Board to publish the findings of the review assessments that state how these contentious CDM projects comply with CDM requirements,” she added.