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Council on Energy, Environment and Water Integrated | International | Independent
REPORT
Energy Policy Roadmap for the Indian Railways
Energy Efficiency and Renewable Energy Interventions
16 November, 2016 | Energy Transitions
Aditya Ramji, Rana Pujari, Shubhashis Dey, Vikas Gaba, Ajit Nafde, Varun Anand

Suggested citation: Ramji, Aditya, Rana Pujari, Shubhashis Dey, Vikas Gaba, Ajit Nafde, Varun Anand. 2016. Energy Policy Roadmap for the Indian Railways: Energy Efficiency and Renewable Energy Interventions. New Delhi: Council on Energy, Environment and Water.

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Overview

This report, in collaboration with the Shakti Foundation, analyses the role of renewable energy and energy efficiency across the Indian Railways (IR) and their potential in reducing the emissions intensity of the rail transport sector in India. As part of its low carbon strategy, the IR plans to reduce emission intensity by 33 per cent in 2030. The study envisions the railway energy policy with goals for renewable energy, particularly solar, energy efficiency and emissions reduction. It also sets the tone for further discussions on the need for a comprehensive strategy around energy management in the IR. Further, it provides concrete recommendations to foster energy efficiency mechanisms in the railways while providing ideas to adopt alternative technologies for the traction of energy efficiency.

Key findings

  • During 2016, a target was set to reduce IR’s energy consumption such that it lowers the railways’ energy bill by USD 750 million within the next 5 years.
  • IR has established energy consumption standards for both traction and non-traction categories.
  • Energy audits have been conducted at various stations, workshops and factories to identify potential interventions for energy conservation and efficiency improvement.
  • IR has targeted 25 per cent savings in electricity consumption and traction energy efficiency by 2030.
  • IR is making efforts to increase renewable energy capacity, which includes solar power, wind energy, and waste-to-energy, to reduce energy costs as well as carbon emissions.
  • IR had set a 1 GW target for rooftop solar in railways stations, car sheds and railway workshops, and a 1.2 GW target of land-based solar PV across all railway zones.
  • IR’s power demand is projected to increase by  9GW from 2012 to 2032. It has a gross solar potential of 2.2 GW.
  • These set targets are expected to lead to the railways’ deriving 10 per cent of all electricity from renewables and reduce its emissions by 22MT.
  • IR would require an investment of USD 2.7 billion to achieve its solar potential. Further, by 2030 the railways’ could achieve 6 billion units of savings from energy efficiency measures.

Emissions savings (million tonnes of CO2) across railway operations with solar PV installations

Source: CEEW Analysis. 2016

Major barriers in implementing low carbon projects

  • Institutional barriers: Having a unified and centrally driven policy framework is crucial. Further, a structured institutional set-up to promote and drive energy-related initiatives is also needed to monitor the progress and efficacy of the initiatives.
  • Lack of incentives: Existing regulatory framework within the Indian Railways is not very clear on the incentive mechanism for the zones or divisions to implement such measures.
  • Financial barriers: Resources for the implementation of energy efficiency and clean energy measures are residual, and often inadequate. This is because infrastructure and maintenance get propriety when it comes to budget allocations.
  • Information and capacity barrier: With a large number of units such as stations, buildings, workshops, and yards and de-centralised procurement/inventory management systems, availability of baseline data is a key gap when it comes to energy initiatives.

Operational

  • Enhance skills of railway staff under the MoU with the Ministry of Skill Development and Entrepreneurship. This could potentially transform the implementation of energy management initiatives across the railways.
  • Build on its MoU with Energy Efficiency Services Limited (EESL) to benchmark minimum performance standards in terms of energy efficiency for various railway operations.

Institutional

  • Leverage the technology portal developed by the National Academy of Indian Railways (NAIR) to promote R&D for energy conservation and efficiency.
  • Use the Innovation Council ‘Kayakalp’ in the Indian Railways to promote new ideas towards energy management.
  • Centralise procurement processes and handhold all zonal railways, as the internal capacity to implement such projects for each zone, will vary.
  • Align the energy management programme with national programmes such as in the case of the National Solar Mission to leverage technical knowledge and financial avenues available to the Government and other stakeholders.

Finance

  • Coordinate and engage closely with State Governments for resource mobilisation for energy management.
  • Explore long-term institutional investors as alternative financing sources.
  • Leverage the International Solar Alliance for access to international finance and technology transfer for renewable energy.
  • Identify low hanging solutions and their respective investment requirements which can then facilitate exploring innovative financing models under the financing cell instituted under the Railway Board, Ministry of Railways.

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Vaibhav Chaturvedi
Fellow
[email protected]
It is necessary for the Railways to adopt an implementation roadmap toward improved energy management through three key imperatives: Strategic, Functional, and Operational. Along with its significant efforts towards energy efficiency and renewable energy, it is also recommended that the Indian Railways consider the adoption of advanced storage technologies in a strategic manner in the future, which will not only help them harness renewable energy to their full potential but will also help to achieve better efficiencies and improved reliability of the system.
Executive Summary

In view of rising energy demand and uncertainty in power tariffs, the Indian Railways has identified the need for an aggressive push towards alternate fuels in the Indian Railways as well as identify potential opportunities for energy savings and realise a cost-effective energy system with least environmental impact. As part of the efforts, the Indian Railways has also been taking steps towards mitigation on Climate Change and is strengthening the Rail Transport sector to increase its intermodal share in freight traffic from 36% to 45% in the next 15 years. Indian Railways’ goal as part of its low carbon growth strategy is to reduce emission intensity by 33% in the year 2030 over the year 2005 by improving rail traction energy and fuel efficiency by 8 – 13% over 2013.

This report analyses the role of renewable energy and energy efficiency across the Indian Railways and their potential in reducing the emissions intensity of the rail transport sector in India. The report also sets out the vision for the railway energy policy with goals for renewable energy, particularly solar; energy efficiency and emissions reduction.

Non-traction energy constitutes about 15% of railways’ total energy consumption. The solar potential is estimated to be about 2 GW across various railway operations, while energy efficiency interventions are expected to provide a cumulative savings of 6 billion units by 2030. These efforts along with traction efficiency could lead to a cumulative reduction of about 138 million tonnes of CO2 equivalent.

While the Indian Railways is looking to increase its portfolio of renewable energy and scale energy efficiency investments, the risks associated with financing for such projects need to be recognised and evaluated.

Going forward, Measurement, Reporting and Verification (MRV) is a crucial post-implementation step, to assess the performance of planned interventions and ensure that desired results in the form of savings is achieved with greater certainty

There exists a huge potential to accelerate these individual initiatives and bring them under a single flagship program and facilitate integrated planning at the zonal level, both inter-zone and intra-zone.

This study while focusing on non-traction operations, recognises the equal if not greater importance of traction energy efficiency. At the same time, it is expected that this study will set the tone for further discussions on the need for a comprehensive strategy around energy management in the Indian Railways.

Way Forward

The Indian Railways has been constantly engaged in the past years, in implementing energy management measures across its sixteen zones. There exists a huge potential to accelerate these individual initiatives and bring them under a single flagship program and facilitate integrated planning at the zonal level, both interzone and intra-zone. Based on the cost-benefit analysis of the identified interventions and having prioritized them accordingly, it is now crucial to adopt a structured implementation plan with well-defined milestones.

It is necessary for the Railways to adopt an implementation roadmap towards improved energy management through three key imperatives: Strategic, Functional and Operational.

Strategic imperatives should lay down the broad policy for energy management in terms of compliance to standards, sourcing / procurement and design aspects. The functional and operational imperatives on the other hand, should focus on implementing and institutionalizing the policy at a zonal level and detail out the MRV mechanism to monitor the performance of the energy management measures.

The Railways must also set out appropriate guidelines for energy efficiency and management on its stations, yards, workshops, and operations in coordination with Zonal railways and other coordinating agencies at the Central and state level. In this regard, the high energy consuming railway station (Category A and A1) which are being taken up for modernization as part of station redevelopment project82, can be looked as priority candidates for taking up energy efficiency initiatives and suitable measures should be included in the planning stage. In addition, B and C category stations, which are expected to see higher traffic in the coming years should also be considered for retrofitting and other energy efficiency measures.

Along with its significant efforts towards energy efficiency and renewable energy, it is also recommended that the Indian Railways should consider the adoption of advanced storage technologies in a strategic manner in the future, which will not only help them harness renewable energy to their full potential but will also help to achieve better efficiencies and improved reliability of the system.

Last but not the least, securing finance for implementing energy management initiatives at scale, is critical. There is a need for the railways to look towards innovative financing instruments to mobilise resources. At the same time, mitigating risks for financiers and developers is essential to give the necessary impetus for scaling energy management interventions.

This study while focusing on non-traction operations, recognises the equal if not greater importance of traction energy efficiency. At the same time, it is expected that this study will set the tone for further discussions on the need for a comprehensive strategy around energy management in the Indian Railways.

Key strategies for Indian Railways

Institutional

  • Planning should be centralised in the near future to make the implementation of such initiatives effective given the varied expertise across zonal railways, while capacity building at the zonal level could be seen as a long-term goal
  • Aligning its energy management programme with similar national programmes such as in the case of the National Solar Mission to leverage technical knowledge and financial avenues available to the Government and other stakeholders
  • Centralised procurement processes and handholding for all zonal railways, as the internal capacity to implement such projects for each zone will vary
  • Use the Innovation Council ‘Kayakalp’ in the Indian Railways to promote new ideas towards energy management
  • Leverage the technology portal developed by National Academy of Indian Railways (NAIR) to promote R&D for energy conservation and efficiency

Finance

  • Coordinate and engage closely with State Governments for resource mobilisation for energy management
  • Identify low hanging solutions and their respective investment requirements which can then facilitate exploring innovative financing models under the Financing Cell instituted under the Railway Board, Ministry of Railways
  • Exploring long-term institutional investors as alternate financing sources
  • Leveraging the International Solar Alliance for access to international finance and technology transfer for renewable energy
  • Investment in energy conservation and other related rail infrastructure, such as electric transmission and OHE, should be termed as green finance
  • Explore partnerships with financing institutions such as IREDA, REMC, IRFC, Nationalised Banks such as SBI and PNB

Operational

  • Enhance skills of railway staff under the MoU with the Ministry of Skill Development and Entrepreneurship which could potentially transform the implementation of energy management initiatives across the railways
  • Build on its MoU with EESL to benchmark minimum performance standards in terms of energy efficiency for various railway operations

HAVE A QUERY?

author image
Vaibhav Chaturvedi
Fellow
[email protected]
Executive Summary
Way Forward
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