Indian Railways (IR) is the country’s biggest energy consumer, utilising about 18 billion units of power and 2.8 million kilolitres of diesel per year. Energy is the second biggest expenditure item for the organisation, accounting for about 24 per cent of its ordinary working expenses.
During the five-year period 2011-12 to 2015-16, IR‘s total fuel bill increased at a compound annual growth rate of 7.5 per cent. In absolute terms, the expenditure on fuel (diesel and electricity) increased steadily until 2014-15, from Rs 203 billion in 2011-12 to Rs 288 billion in 2014-15.
In the past couple of years, however, IR has implemented a number of initiatives to optimise consumption and reduce expenditure on fuel. As a result, its fuel bill declined by about 3 per cent and 6 per cent in 2014-15 and 2015-16 respectively. The current (2016-17) annual expenditure on fuel is estimated at about Rs 268 billion.
Typically, about 80 per cent of IR’s total energy consumption is used for traction and the remaining 20 per cent for non-traction applications. Around 85 per cent of the electricity used by trains is from thermal power plants, 11 per cent from hydel and only a small percentage is from renewable sources – solar and wind.
To better manage its energy costs, IR is undertaking a number of initiatives such as procuring cheaper power, improving the efficiency of power utilisation, enhancing its renewable energy capacity and engaging in power trade. Instead of relying on state discoms, IR has operationalised its deemed licensee status. The organisation has started sourcing some of its requirements through a competitive tender/auction directly from producers. It has also contracted about 550 MW power directly from Ratnagiri Gas and Power Private Limited. With these efforts, the average rate of procuring power has reduced by around 35 per cent. Overall, IR’s electricity expenses declined by Rs 13 billion in 2015-16.
Further, IR is developing its own captive capacity, including a 1,000 MW power plant at Nabinagar, Bihar, in collaboration with NTPC Limited. The first 250 MW unit was commissioned in March 2016 and the other three units will be ready by March 2018.
Innovative energy efficient solutions and techniques are also being deployed for reducing the annual energy consumption and expenditure in both traction and non-traction areas. IR has managed to reduce the specific energy consumption in traction by deploying energy efficient rolling stock with three-phase technology, regenerative braking systems, capacitor banks for improving the power factor, microprocessor-based energy meters, high horsepower (HP) locomotives (9,000-12,000 HP), etc.
In the non-traction area, IR has been able to reduce its consumption even as its load has increased. This has been achieved through extensive energy audits and using LED lighting (100 per cent use of LED lighting in 1,300 stations) and five-star-rated equipment, 100 per cent production of electric multiple units and locomotives, installing energy efficient water coolers and pumps, and using variable voltage variable frequency control for cranes, lifts and escalators, etc.
On the renewable energy front, IR is aiming to develop 1,200 MW of capacity to meet its energy needs. About 1,000 MW of capacity will be added through projects in the solar segment. Of these, about 500 MW of rooftop solar solutions are planned on stations and other buildings to meet non-traction loads. The balance 500 MW is planned to be set up through land-based solar installations.
Around 16 MW of rooftop systems have already been installed and another 80 MW is currently in progress. Tenders have also been floated for 100 MW by Central Electronics Limited (under the public-private partnership mode) and 50 MW by Railway Energy Management Company Limited. With regard to land-based systems, the installation of 50 MW solar power is currently under progress and tenders are at the final stage for another 200 MW.
Going forward, IR’s electricity requirements will continue to grow as it undertakes greater electrification. Its power requirements, even after taking efficiency measures, will triple by 2030 to 49 billion units. To support its increasing requirements, IR is upgrading its electrical infrastructure. This includes dedicated transmission lines, implementation of supervisory control and data acquisition systems and the use of better quality transformers. IR is also considering the procurement of 5-10 per cent of its total power through the trading route. Besides, to optimise the power purchase cost, it plans to enter into long-term and short-term power purchase agreements.
Given IR’s future plans, its energy requirements will present significant opportunities for power producers, renewable energy developers, technology providers and manufacturers of rolling stock and electrical equipment.