Indian Railways (IR) has a target to source at least 10 per cent of its energy requirement from renewable sources by 2020-21, by setting up 1,200 MW of solar and wind power capacity. Part of a broader plan to rationalise its expenditure on electricity, which currently accounts for 25 per cent of IR’s ordinary working expenses, the target does seem ambitious. But Sudhir Garg, executive director, electrical energy management, Ministry of Railways, is optimistic about it. In an interview with Renewable Watch, Garg talks about IR’s experience so far in implementing solar projects, the benefits derived from these, the roadblocks in implementation, new and innovative models adopted by IR and the way forward…
What are IR’s total power consumption and associated expenses?
In 2016-17, IR consumed over 18 billion units of electrical energy for its traction applications, which is about 2 per cent of the total electrical energy generated in the country. The bill paid for consuming this energy was about Rs 113 billion which includes Rs 95 billion for traction applications and Rs 18 billion for non-traction applications. As of now, of the total requirement of about 2,000 MW of energy for electric traction, more than 1,000 MW is procured under open access. This has helped us bring down the average cost of power in states where power is procured through open access from Rs 7 per kWh to about Rs 5 per kWh.
When and how did IR start its renewable journey? Where does it stand today in terms of achieving the set targets?
IR has been very conscious about energy savings and efficiency, and has been consistently working towards reducing its energy bill on the traction and non-traction sides by adopting multi-pronged strategies, including procuring energy from the open market, introducing latest energy efficient locomotives and adopting energy efficient technologies.
Another point to note is that IR’s expenses on diesel-based traction are much higher (about Rs 180 billion) than those on electrical energy despite carrying only about one third of the traffic. In a move to expedite complete electrification of the rail network, IR has recently advanced the deadline for 100 per cent electrification of the broad gauge network by two years to 2020-21.
Against this backdrop, IR embarked upon its renewable energy journey in 2015, with the aim of achieving an energy transformation through clean energy, which has also proved to be more economical than conventional power. We have set a target to procure 1,200 MW of renewable energy by 2020. This comprises 1,000 MW of solar power capacity and 200 MW of wind-based capacity. While this power is initially being used on the non-traction side, we are working towards using renewable energy on the traction side by adopting storage technologies.
About 35 MW of solar power capacity has been installed as of October 2017. Of this, 12.35 MW of capacity was installed between April and October 2017. During the same period, another 72 MW of rooftop solar plants were contracted in developer mode. Railway Energy Management Company Limited (REMCL) has also invited tenders for 32 MW of solar capacity while 20.5 MW of wind capacity was tendered in Tamil Nadu, Andhra Pradesh, Madhya Pradesh and Maharashtra. In sum, about 130 MW of capacity has either been set up or is in the process of being allocated.
What have been the key challenges in implementing renewables and how were these addressed?
The initial challenge was to convince the organisation that renewable energy can be a successful and economical business alternative to conventional power. The next challenge was to choose from various models to achieve this goal. We finally zeroed in on the public-private partnership (PPP) model as it assured minimal upfront investment by IR.
IR faces a challenge in the maintenance of panels located over a large area, for which the PPP model has proved to be a good solution. It further proved advantageous as it ensured the implementation of the latest technologies, such as compact substations and improved cabling. This allowed IR to learn to implement these new solutions in its existing projects. The upgradation of the equipment in a traditional manner would not have been beneficial for achieving the targets. In addition, for developers, there was the challenge of implementing the best financial model to get optimal results, which led to out-of-the-box thinking for technology implementation. The organisation also faces challenges such as ensuring that even smaller stations attract developer interest and not just the major ones, fulfilling its 8 per cent renewable purchase, overcoming interstate transmission issues through open access, and implementing net metering regulations across states so that it does not constrain solar energy fed into the grid, and ensuring an optimum energy mix of wind and solar so as to ensure 100 per cent renewable energy use in the long term.
The feasibility of implementing renewables for IR will depend on three factors which are as follows…
- Policies governing net metering and open access will directly affect the implementation of renewables, especially in the non-traction segment.
- Solar and wind power will need load balancing as they are intermittent and variable. While technologies such as energy storage will be required to ensure consistent supply of this power, currently these are not economically feasible for IR.
- IR will need to build internal capabilities including load forecasting, renewable power management, and power trading techniques in order to decarbonise successfully. REMCL is working towards developing these capabilities.
How have solar power tariffs changed over the past two years as far as IR’s tenders are concerned?
From 2015 to 2017, IR has seen a significant fall in tariffs. Solar tariffs have fallen by almost Rs 1.50 per kWh, that is, from about Rs 5 per kWh in 2015 to Rs 3.50 per kWh currently. It must be noted that the tenders are open for all interested developers.
How much investment has been made in developing renewable energy capacity? What results are you expecting going forward?
Till date, about Rs 200 million has been invested in developing solar power projects, but the savings in energy bills are estimated to be much higher. The return on investment is quite good because we are generating solar power at around Rs 4 per kWh, whereas the cost of conventional energy from discoms is about Rs 8 per kWh. This could mean that IR is earning Rs 4 per kWh from a rooftop solar plant. In the Delhi area, we have installed around 5 MW, which is expected to save around Rs 4.2 million per year in electricity bills. Therefore, in 25 years, IR could save a minimum of Rs 100 million, considering the current electricity price offered by discoms in the Delhi area itself. Moreover, we believe that discom rates will keep increasing, which will further increase savings. Now the entire organisation, which was initially sceptical about implementing solar projects and procuring renewable energy, is for the first time totally convinced about the electrical department’s plan.
Has there been any budget allocation for renewables by IR?
Traditionally, when the budget is set in the government sector, additional funds are allocated for various purposes. However, in the case of the electricity budget for IR, there has been a trend reversal, as the additional funds have been decreasing over time. We would like to say that the cost-saving model employed by IR is possible in all sectors of the government.
We have implemented energy efficiency projects across the country by adopting LED lights, LED fans, efficient air conditioners, etc. Till date, about 3,500 railway stations have been provided with 100 per cent LED lights. All remaining stations and railway buildings will be covered in 2017-18. Majority of the work in this area is being done under ESCO model which does not require any investment from IR. This will help in reducing energy consumption by 25 per cent over the next two years. IR’s current bill for this exercise is around Rs 17 billion and in the next one to two years, we hope to save Rs 4 billion-Rs 5 billion, without making any significant investments.
Do you have any plans for implementing electric storage technologies in the future?
In due course, IR plans to meet 100 per cent of its energy requirement from renewables, which is not possible without energy storage. As a short-term solution, IR plans to use batteries from railway coaches that have completed four years of use and are lying idle. Going forward, the organisation will devise a formal plan to implement battery storage technologies.