December 2017

Editor Dolly Khattar

From biodegradable toilets to solar-powered railway stations, Indian Railways is changing the way it works to reduce its carbon footprint. The utility operates one of the world’s largest rail networks and is the single biggest consumer of electricity in the country, accounting for almost 2 per cent of India’s total power consumption. It is also the single largest consumer of diesel.

Since 2015-16, it has embarked on a journey to transform its energy mix to increase the share of renewables. The idea is not just to meet its renewable purchase obligation (RPO) but to achieve a lower energy bill on the back of declining renewable energy generation costs.

Indian Railways has, therefore, come up with a very ambitious renewable energy programme under which it targets to achieve 1,000 MW of solar and 200 MW of wind power capacity by 2020-21. A nationwide project to set up rooftop solar power systems at more than 7,000 railway stations is already under way. Additionally, Indian Railways plans to set up utility-scale solar and wind power projects on unused land parcels owned by it. It has also proposed a 700-800 MW solar power park in Madhya Pradesh.

According to a study by the Council on Energy, Environment and Water, Indian Railways could draw up to 25 per cent of its electric power needs from renewables and achieve 5 GW of solar power capacity by 2025. While the utility is yet to formally endorse this much bigger target, a 5 GW plan will provide a significant opportunity for solar developers, with an estimated 1.1 GW coming from rooftop and 3.9 GW from utility-scale projects. Given that Indian Railways is a guaranteed consumer and has a high electricity demand, any perceived counter-party risks would be mitigated for project developers and investors.

The Railways’ seriousness in adopting renewable power is clearly visible from the fact that its financing arm has recently raised $500 million through green bonds issue, which is listed on the International Securities Market of the London Stock Exchange.

Being a well-financed, state-owned utility with massive captive power consumption, Indian Railways does not face any challenges pertaining to renewable power offtake and arrangement of funds for project development. A key challenge it faces in adopting renewables is on the traction side owing to the inherently intermittent nature of renewable energy. This, however, can be addressed through storage solutions.


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