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Indian Railways saved over Rs 5,000 crore in two years on power bill

The Indian Railways, which is working towards its "Mission 41k" plan to reduce its energy bill by Rs 41,000 crore over the next decade, announced it has succeeded in achieving a cumulative saving of Rs 5,636 crore in two years between April 2015 and October 2017.

The national transporter has credited the savings to “Business As Usual” (BAU) mode by procuring power directly under open access arrangements. “This cumulative figure is likely to further go up to Rs 6,927 crore by the end of the current financial year in March, 2018 which is around Rs 1,000 more than the stipulated target,” the rail ministry said. 

This comes on the backdrop of the nod given by the Central Electricity Regulatory Commission (CERC) in 2015 to Indian Railways granting it the status of deemed distribution licencee under the Electricity Act, 2003 bringing railways on a par with discoms.

CERC had issued directions to state transmission utilities and state load dispatch centres to facilitate open access to railways on existing transmission network as deemed licensee.

“In line with this, Indian Railways approached CERC for issue of necessary guidelines to all State Transmission Utilities (STUs) and State Load Dispatch Centers (SLDCs) to facilitate open access to Indian Railways on existing transmission network as deemed licensee,” the ministry said. 

The railways expected savings of Rs 3,000 crore accruing as a result of the 2015 CERC order. The transporter contracted about 500 megawatt (MW) power from Ratnagiri Gas and Power Pvt. Ltd (RGPPL) in 2015 for consuming it in the states of Maharashtra, Gujarat, Madhya Pradesh and Jharkhand at Rs 4.70 per unit. The flow of power in all the four States was completed by January 2016.

Railway Energy Management Co. Ltd, an arm of Indian Railways, contracted 50 MW power through open tender at Rs 3.69 per unit in its central transmission utility-connected network from Dadri to Kanpur in Uttar Pradesh in December 2015.

“Further, in the current year, flow of power started in the state of Rajasthan from January 1, 2017, in Damodar Valley Corporation (DVC) area from August 17 and in the states of Haryana and Karnataka from Oct 17,” the ministry said.

Electric traction power is presently being sourced through the open access route in seven states -- Maharashtra, Gujarat, M.P, Jharkhand, Rajasthan, Haryana and Karnataka -- and DVC area.

ETEnergyworld was the first to report that Haryana, Punjab and Karanataka had joined other states in granting approval to Indian Railways for procurement of electricity.
“States of Bihar, Uttar Pradesh, West Bengal, Tamil Nadu and Telangana have also agreed to permit Railway for flow of power though Open access route which is likely to start by next year. The talks of Indian Railways with remaining states are going on for procuring power through open access route,” the ministry said. 

ETEnergyworld had also reported that the national carrier had planned to set up additional 8,500 km of transmission lines to end dependence on state discoms.)

As on date, of the total requirement of about 2,000 MW of electric traction power, more than 1,000 MW is flowing under open access. This has reduced the average cost of power in these states (where power is flowing under open access) to about Rs 5.00 from earlier cost of more than Rs 7.00 per unit, the ministry said. 

“This will further reduce the diesel bill and multiply the savings in energy bill, taking it to about Rs 10,500 crore per annum in the next few years,” the ministry added. The national carrier consumes 18 billion units of electricity and spends around Rs 10,000 crore on its electricity bill annually. It had spent Rs 9,200 crore in the previous financial year.

 

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