At the end of 2016, the government’s 10-year energy blueprint predicted that non-fossil fuel sources would account for significant 57 per cent of the country’s total electricity capacity by 2027, with increased investments in renewable energy projects. In the midst of this nationwide rise in renewables is Indian Railways (IR), which aims to source at least 10 per cent of its energy requirement from renewable sources by 2020-21. The utility plans to set up about 1,000 MW of solar and 200 MW of wind power projects by 2020-21 across zonal railways and production units.
Operational since 1853, IR’s rail network, spread over 66,687 route km, is one of the largest in the world. It is also the single largest consumer of electricity in India, accounting for roughly 2 per cent of the national energy consumption.
While IR was for a long period dependent largely on diesel for its traction applications, it commenced on a journey of railway electrification on February 3, 1925 with the launch of the first electric train between Bombay VT and Kurla Harbour, covering a distance of 16 km. Its electrified network has since grown to 26,000 route km, constituting about 40 per cent of the total railway network, and is likely to expand further to 63,000 route km by 2021-22.
In 2016-17, IR consumed over 18 BUs of electrical energy, 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, of which Rs 95 billion was for traction applications and Rs 18 billion for non-traction applications.
It is important to note that IR’s expenditure on diesel-based traction, which carries only about one third of the traffic, is much higher (about Rs 180 billion) than that on electric traction. Therefore, in a move to expedite the 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.
As the process of electrification is under way, the government is also engaged in diversifying IR’s energy mix in favour of renewables so as to reduce its dependence on fossil fuels indirectly. IR embarked on its renewable electrification journey in 2015-16 and within a year and a half, it has managed to achieve a significant scale of deployment. About 35 MW of solar power capacity has been installed as of October 2017. Of this, 12.35 MW 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. Meanwhile, 20.5 MW of wind capacity was tendered in Tamil Nadu, Andhra Pradesh, Madhya Pradesh and Maharashtra. IR’s total renewable portfolio stands at 130 MW, which has either been set up or is in the process of being allocated. IR is planning another 400 MW of land-based solar capacity to be set up through various other agencies across various states.
While this power will be used for non-traction purposes, IR is now working towards using renewable energy for traction as well. It launched its first 1,600 horsepower solar-powered diesel electrical multiple unit train in mid-2017. The train will run from Sarai Rohilla in Delhi to Farukhnagar in Haryana. A set of 16 solar panels has been installed on each coach to power the lights, fans and information display systems inside the passenger coaches. Jakson Engineers Limited has developed the project under the guidance of the Indian Railways Organization for Alternative Fuels. The train has a power backup and can run on battery for at least 72 hours.
In due course, IR plans to meet 100 per cent of its energy requirement from renewables, which is not possible without energy storage. According to Sudhir Garg, executive director, electrical energy management, Ministry of Railways, “As a short-term solution, IR is planning 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.”
IR is collaborating with several contractors to meet its solar power objective. The technology is expected to power railway facilities across 17 states and union territories for up to 25 years. At the end of September 2017, it awarded a contract to Azure Power for the delivery of 20 MW of rooftop solar installations.
Working in tandem with Azure Power is ABB India, which is currently helping to provide around 40 per cent of the country’s solar power through installations. Now, the company aims to equip 750 Indian railway stations with solar inverters.
In August 2017, REMCL auctioned 67.38 MW of rooftop solar projects for IR. These projects are being set up on the properties owned by IR across India. Mytrah Energy emerged as the biggest winner in this auction, securing projects totalling 30.87 MW. The company quoted the lowest tariff of Rs 2.39 per kWh to develop 1.15 MW of rooftop solar capacity for North Frontier Railways. Azure Power won projects totalling 25.26 MW, Fourth Partner Energy won 6.95 MW, Sangam Advisors 3.3 MW, and ReNew Power Solar secured a 1 MW rooftop solar project for IR. The initial tender was announced in April 2017 for an aggregate capacity of 52 MW, but the interest received from developers was much higher than the tendered capacity. The winning tariffs realised under the tender were low owing to the central financial assistance (CFA) provided for these projects by the Ministry of New and Renewable Energy to developers via IR. The CFA will be available to the winning bidders after successfully meeting the development criteria.
From 2015 to 2017, IR has witnessed a significant fall in tariffs due to the global decline in solar panel prices and the provision of various government incentives. Solar tariffs have fallen by Rs 1.50 per kWh, from about Rs 5 per kWh in 2015 to Rs 3.50 per kWh at present. Notably, the railway tenders are open for all interested solar developers and are not restricted to developers using domestically manufactured panels.
Leveraging open access
While clean energy implementation is one of the targets of IR, the primary mission is to optimise its energy generation and utilisation. It is, therefore, implementing a number of measures and devising strategies to minimise its energy bill.
IR has undertaken energy efficiency projects across the country by adopting LED lights, LED fans, efficient air conditioners, etc. So far, around 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. The majority of the work in this area is being done under the ESCO (energy service company) 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 it is expected to save Rs 4 billion-Rs 5 billion over the next one to two years, without making any significant investments.
A key achievement of IR has been leveraging open access. Earlier, IR procured electricity for its traction applications as an ordinary consumer, despite being the largest single user of energy in the country. Accordingly, it paid higher tariffs for energy duly taking the burden of distribution losses, cross-subsidy and other surcharges of discoms. The Electricity Act, 2003, conferred deemed licensee status to IR due to its involvement in the generation, transmission and distribution of energy. IR had been working to get this provision of the Electricity Act operational; however, it did not come through for some time due to various factors.
The railway minister took up this task with renewed vigour and a strategy was subsequently drawn up. In line with this, IR approached the Central Electricity Regulatory Commission for the issue of necessary guidelines for all state transmission utilities and state load despatch centres to seek open access on the existing transmission network as a deemed licensee. This enabled IR to procure energy from any generating unit including captive generating plants, traders and through the power exchanges up to the interconnection point of the railway network as per the provisions of the Railway Act.
So far, of the total energy requirement of about 2,000 MW for electric traction, more than 1,000 MW has been procured under open access. This has helped IR bring down its average cost of power from Rs 7 per kWh to about Rs 5 per kWh in states where power is procured through open access.
Key challenges and the way forward
IR’s experience of shifting to renewables has proved to be a success story. Till date, about Rs 200 million has been invested in the development of solar power projects, but the savings in energy bills are estimated to be much higher. “The return on investment is quite good as 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 means that IR is earning Rs 4 per kWh from a rooftop solar plant. In the Delhi region, we have installed around 5 MW, which is expected to save around Rs 4.2 million per year in electricity bills. Therefore, over 25 years, IR could save a minimum of Rs 100 million, considering the current electricity price offered by discoms in the Delhi area. Moreover, we believe that discom rates will continue to increase, which will, in turn, increase savings. Today, the entire organisation, which was initially sceptical about implementing solar projects and procuring renewable energy, is for the first time entirely convinced about the electrical department’s plan,” says Garg.
The maintenance of panels located over a large area has been a challenge for the utility, for which the public-private partnership model of renewable energy development has proved to be a good solution. The model also ensures the implementation of the latest technologies such as compact substations. The upgradation of equipment in the traditional manner would not have been as effective.
To achieve 100 per cent renewable energy use in the long term, the organisation needs to ensure that even smaller stations attract developer interest and not just the major ones. It also needs to fulfil its 8 per cent renewable purchase obligation, overcome interstate transmission challenges through open access, implement net metering and achieve an optimum energy mix of wind and solar.
Further, there are several challenges that need to be addressed. The feasibility of implementing renewables for IR depends on various factors such as state policies for renewable energy, specifically policies governing net metering and open access. These will directly affect the implementation of IR’s renewable initiatives, especially in the non-traction segment. Another key challenge pertains to load balancing. As solar and wind power are intermittent and variable sources of energy, they will require load balancing through technologies such as energy storage to ensure a constant supply of electricity. However, the technologies available for load balancing currently are not feasible for IR. The organisation will have to build certain internal capabilities in order to decarbonise successfully. These include load forecasting, renewable power management and power trading techniques, and REMCL is working to develop these capabilities.
In sum, IR’s renewable energy endeavour is crucial for India’s overall carbon reduction goals. As IR is the single largest consumer of electricity in the country, cutting down its fossil fuel uptake will help meet the country’s commitment to renewables and have a positive impact on the environment.