- < A .. -L. .... --... r-L ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ ~ cdrp ~0 ANNEX INDIA ORISSA STATE POWER SECTOR RESTRUCTURING PROJECT ENVIRONMENTAL ASSESSMENT A. Environmental impact Snm 1. Enmental Inact of the Reform Progm The overall enviromnental impact of the reform program is expected to be significantly positive. Higher electricity tariffs and improved metering and collection will encourage electricity conservation. Orissa's exsting thermal generation will be renovated and new capacity will be constructed and operated by private utilities in accordance with moden practices and applicable national environmental standards, which are in line with Bank standards. All three major ongoing generation projects in Orissa are being developed in accordance with the Bank Group environmental standards: the Upper Indravati project and NTPC's Talcher are both supported by the Bank under earlier operations; lb units 3-4 by IFC (approved in July 1994). Transmission and distnrbution rehablitation, load nuanagement/electricity onservation and technical assistance under the proposed Project will significantly reduce power system losses and help improve the efficiency of electricity consumption, thereby also contribute to contaning environmental emissions. 2. The two main investment components to be financed under the proposed Bank loan, Part A' Transmission and Distnbution and Part B: Load ManagementlEectricity Conservation are discussed below. They account for USS 300 million or about 86 % of the total loan amount The details of the watershed management plan to be financed under Part E: Upper Indravat, are also given. That component is estimated to require about US$ 15 million under the Bank loan or about 4 % of the total loan amount. The balance of the loan, US$ 35 million, is allocated to Part C: Technical Assistance, Upper Indravati resettlement and rehabilitation under Part D. B. Part A: Transmission And Distnbution Introduction 3. Three trnsmission line projects have been remiewed and wil be included in the first phase of the loan. Additional projects will be submitted during Project implementation. The environmental issues related to these transmission and distribution projects in general and to the three selected projects individually are discussed below. Environmental analyses w.:i1 be submitted for all subsequent projects as they are prepared, in line with agreed appraisal criteria I Enviromnental Assessment and Clearance Process Forest Clearance: 4. Under the 1980 Conservatior. of Forest Act, approval for new lines must be obtained from the NMnistry of Environment and Forest (MOEF) regional office. Power line routing in India undergoes extensive review in the project planning stage. Orissa State Electricity Board (OSEB) and under the Project its successor, the Grid Corporation of Crssa (GRIDCO) must demonstrate that the power hine routing involves a minimum of forest land with alternative route surveys. The alternative routes are surveyed jointly by GRIDCO engineers and GOO's Department of Forest (DOF) personneL During the application review and approval process the review agencies comment on the application, and can return it to GRIDCO for required modifications. MOEF Clearance is not required if the joint line survey concludes that no forest land is involved; in this case DOF will issue a letter to this effect. In case forest land is involved, the application undergoes the following stages of review: (a) GRIDCO submi the application to the Dimsional Forest Officer, (b) Divisional Forest Officer, after review and clearance, submits the application to the Conservator of Forest; (c) Conservator of Forest, after review and dearance, submits the application to the Principal Chief Conservator of Forest; (d) Principal Chief Conservator of Forest, after review and clearance, submits the application to the Forest Department, Govermment of Orissa; (e) Principal Secretary, Forest Depament, Government of Orissa, after review and clearance, submits the application to the MOEF Inspector General. The Advisory Committee of the Forest Department reviews the application and calls in the beneficiaries, GRIDCO and the State Forest Officer, to discuss the proposal; and (f) approval comes to the Principal Secretary, Forest Departnent of Orissa. The approval will contain details of any compensatory forest land approved by the Revenue and Forest Departments. The land for compensatory afforestation is provided by the state govemment; in addition, an assessment is made on a per acre basis for compensatory afforestation activities. Land Acquisition: 5. Under the Indian Telegraph Act, transmission towers can be erected on private land, however, compensation must be paid. The ownership of the land is not acquired by the tansmission company. 2 Assessment Of Three Transmission Projects For Inclusion In The Project Project descriptions 6. The following three transmiission projects wil be included in the first phase of the loan. 220 kV DC BrajLarajnagar - Bolangir: 7. The construction activities include: (a) construction of a 220 kV DC line (170 km) from Brajrajnagar to Bolangir; (b) establishment of a 220/132 kV 1 x 100 MVA substation at Bolangir, (c) extension of two 220 kV feeder bays at Brajrajnagar, and (d) establishment of a PLCC network for the above. 220 kV DC Meramundali - Bidanasi: 8. The construction activities include: (a) construction of 220 kV DC line (105 hIn) from Meramundali to Chandaka; (b) establsment of a 220/132 kV 2 x 100 MVA substation at Cuttack (c) extension of feeder bays at Meramundi and Chandaka; and (d) establishment of a PLCC network for the above. 220 kV DC Duburi - Paradip: 9. The construction activities include: (a) construction of 220 kV DC line (100 km) from Duburi to Paradeep; (b) establishment of a 220/132 kV 2 x 100 MVA substation at Paradeep; (c) extension of two 220 kV feeder bays at Duburi; 3 (d) inter-linking 220 kV Paradeep substation with Paradeep existing 132 kV substation, (8 kon of 132 kV DC line); and (e) establishment of a PLCC network for the above. Environmental issues and mitigation strategies 10. The issues below have been addressed during the conceptual design. Resttlement and rehabilitation: 11. There will be no resettlement involved in the above projects. Transmission line rights of way and substation site impacts on land use: agiclturl forest areas wetlands. wildlands: 12. The 220 kV DC Duburi - Paradip and the 220 kV DC Meramundali - Bidanasi transmission lines do not cross forest land.. The 220 kV DC Brajaraniagar - Bolangir tasmission line involves 5 ha of forest land. With such a small amount of forest land involved, habitat fragmentation and invasion of exotic vegetadon species would not be an issue. The application for MOIEF Clearance is currently being processed. Transmission line towers will not impact agricultural land uses since the transmission company does not acquire ownership of the rights of way. There are no wildlands involved in the transmission line routes. Access roads in remote areas increase in hunting exploitation of forest resources, induced developnent due to new access coridors. human settlement and more extensive clearing: 13. With only 5 ha of forest land involved in one of the projects, these issues are not of concern. Existing forest roads are used by GRIDCO for access, no new roads are built for this purpose. Clearing (erosion. loss of habitat) and control of vegetation in rights of ways. including mechanical and chemical (herbicide) clearing operations. (chemical contamination of site and rainfall runoff): 14. After the power lines are strung on the towers, the forest department re-vegetates the areas that have been cleared for construction. Chemical herbicides are not used in right-of-way clearance. Erosion during constructio. and along access roads, substation and transmission tower sites: 4 15. GRIDCO will undertake a monitoring program of construction activities, steps will be taken to control these impacts during construction Maintenance of the new ifrastructure will include erosion control at the transnission tower bases (especially in hilly terrain) and substation pads. Potential electromagnetic frequengy (EMMd) radiation effects, radio noise and television interference, and audible noise along transmission line routes. exposure of substation opertions eonnel to potential EMF hazards: 16. GOI regulations (Indian Electricity Rules, 1956) on minimum transmission lne clearance distances to address safety and EMF effects are applied by GRIDCO. The Rules specifyr minim horizontal and vertical distances between power lines, roads and structures, and cover proximity to airports. Public access to substations towers and electrocution hazrd proximity to airports: 17. GRIDCO will effect restriction of public access, by fencing and security of substations and towers (required under Indian Electricity Rules). A consumer safety program is icluded in the ODA technical assistance. The Indian Electicity Rules cover safety vnth regard to tra ng and storing materials near overhead lines, accessibility of bare conductors, danger notices, provisions applicable to protective equipment, precautions to be adopted by consumers, owners, electrical contractors, electrical workmen and suppliers, and inspections. The Indin Electricity Rules also address safety and protective devices, such as distance relays and ground fault protection. Alternatives 18. Alternaties selected by OSEB were based on cntena of energy conservation through improved efficiency of the trnsmission system, that is, reduction of system losses and increased reliability of the system. Load management/electricity cownservation will be addressed under the Project. Routes and substation sites are selected for minimum impact on forest resources (a statutory requirement), and minimal impact on crowded urban areas, (substation placement in Cuttack rather than Bhubaneswar for instance). The transmission schemes chosen are double-circuit (DC) lines to minimize rights of way requirements. Technical Assistance 19. A technical assistance component of the project will be provided under an ODA grant, to begin in the last quarter of 1995, extending for a period of three years. Under this technical assistance the environmental management capabilities of the Grid Corporation of Orissa (GRIDCO) will be developed. The objective of the technical assistance is to introduce 5 environmental management systems throughout GRIDCO, it's suppliers, and it's network of distributors. Activities of the ODA technical assistance will include: (a) development of an organization and staffing plan for the environmental management unit (based on comparisons with similar utilities on an international basis, as well as industrial organizations operating within the environmental performance standards of GOI); (b) development of a staffing plan for hiring or retraining skilled environmental staff (which will include a salary survey of environmental professionals and technicians in the public and private sectors), together with the definition of services that could most cost-effectively be provided by consultants; (c) development of a financial plan for the environmental unit; (d) development of a corporate environmental policy for GRJDCO; (e) ensure that contractual obligations or other measures are put into place on privatized generation and distribution to comply with GRDCO's environmental policies; (0) development of systems to enable GRlDCO to meet the requirements of relevant Indian (and where appropriate international) environmental standards in a cost effective and efficient way, (g) development of systems to ensure that actions recommended by the environmental management unit are acted upon by corporate management in GRLDCO, and define methods to evaluate and monitor performance with respect to project implementation; (h) development of an approach to consumer education in energy savings and a customer advisory service; (3) a coordinated in-country training program for staff ofthe environmental management unit of GRIDCO; 0) evaluation of alteative strategies for improving energy efficiency; (k) establish an educational program to improve consumer safety; (I) develop capabilities with respect to environmental auditing; 6 (m) undertake a study tour to assess environmental management systems associated with UK transmission and distnbution systems; (n) support GRIDCOs planning capability for new transmission systems by developing environmental assessment (EA) procedures and establishing criteria for evaluating direct and indirect environmental and social impacts associated with new * development proposals; (o) undertake Eks of selected routes and standardize approaches adopted on issues such as land severance; and (p) development of a system of energy audits and energy efficiency, and set targets based on demand side management. Management of Polvchlorinated BipheMnls (PCB's) 20. Prior to initiation of power distribution system rehabilitation under the Project, when electrical equipment will be replaced, technical assistance will be provided to GRIDCO for the environmentally sound management of PCB electrical equipment. The technical assistance will cover management and cleanup of transformer installations, discarded equipment, and the repair shop. This technical assistance will be provided by Monenco (specific projects) and ODA (staff training). 21. Various components of the existing power systems are up to 30 years old, and since the use of PCB's in electrical equipment was discontinued (in most countries) fairly recently, some of the existing power system electrical equipment probably contains PCB's. The technical assistance will address the following: (a) development of environmental guidelines which review GOI (or international) regulations concerning the use, retrofitting, storage and disposal practices for PCB's and PCB electrical equipment; (b) environmental guidelines should state which of the existing system electrical equipment would be replaced, and if any of this equipment has been tested for PCBs; (c) the environmental guidelines should detai how PCB electTical equipment and PCB's would be tested or otherwise identified; and (d) the environmental guidelines should detail an environmentally sound PCB management plan for safe storage and/or disposal of PCB electrical equipment. The PCB management plan should include specifications for safe handling 7 practices, including personnel protective equipment and clothing, and the environmental guidelines should provide details of safe transfer and secure storage areas. Monitoring 22. The following monitoring plan will be adopted as a policy of GRIDCO to track the effectiveness of mitigation techniques, and address recognized problems in an appropriate and timely manner. Development of a system for bringing environmental problems to the attention of management is included in the ODA technical assistance. Some of the items listed under the following monitoring program do not relate to the three projects proposed; however, these issues may relate to other GRIDCO transmission lines. This regular scheduled monitoring program will consist chiefly of visual inspections during construction and operation for: (a) erosion along access roads, substation and transmission tower foundations; (b) encroachment of settlenents within rights of ways, encroachment of settlements within protected areas via transmission line access roads, exploitation of forest resources in protected areas via access roads; (c) vegetation clearances below transmission lines, and invasion of exotic species along right of ways; (d) transformer fluid leakage and spills; and (e) safe storage and disposal of PCBs. C: Part B: Load Management/Electricity Conservation 23. The overall environmental impact of the reform program is expected to be significantly positive. Higher electricity tariffs and improved metering and collection will encourage electricity conservation. Based on the work of the Metering Worldng Group ofthe Refonn Implementation Organization, about 2/3 of OSEB's meters are not worldng properly or are not functioning at all. Part B will help GRIDCO purchase and install reliable meters to replace them. The implementation (physical installation) involves no impact on the enviromnent. Once installed and operational, the meters will facilitate accurate metering and on that basis correct billing of consumers. Along with the increases in electricity rates introduced since 1992 and continuing program of tariff adjustments, this will send the right price signals to consumers (fir the first time for most ofthem) and is expected to help contain the growth of electricity demand in Orissa. This in turn will result in lower emissions from the generation plants that are operated to meet the demand and help defer some of the new generation projects. 8 24. The balance of Part B is for load research and direct measures to manage load and conserve electricity. The load research program will help GRIDCO better understand how its consumers use electricity. This will help in design of more effective tariff structures, which are i more responsive to the needs of the consumers and load management/conservation potential. 25. Part B will also support a pilot program of load management/electricity conservation investments. A comprehensive technical assistance program will be implemented to help GRDCO and electricity end-users design and implement actual measures. 9