New Delhi: Indian Railways could draw up to 25% of its power needs from renewables and would need an investment of $3.6 billion to meet the 5GW target of solar energy by 2025, according to a study released on Wednesday.
The Council on Energy, Environment and Water (CEEW) study, funded by UNDP (United Nations Development Programme), identifies key policy and regulatory challenges that developers face while supporting the Railways’ renewable energy push.
A potential 5GW target provides a unique opportunity for solar developers, with an estimated 1.1GW coming from rooftop and 3.9GW from utility scale projects. The Indian Railways is a guaranteed consumer and has a growing electricity demand, which should mitigate any perceived counter-party risks for project developers or investors.
“We want Indian Railways to become a green engine of growth. Decarbonisation is extremely important for Railways. We have set up a target of electrifying the entire network of Indian Railways in next 10 years with at least 90% of track electrification in next five years," said railway minister Suresh Prabhu. “We are looking to add 1,000MW of solar and 200MW of wind energy out of which 36MW has already been commissioned," he said.
Based on railway operations and land availability, 12 states have been identified across India, wherein rooftop and utility scale projects could be taken up to meet the 5GW target for solar.
The study ranks these 12 states in terms of the ease of doing business for developers, and finds that Madhya Pradesh ranks the highest for utility-scale projects, while Karnataka ranks highest in the case of rooftop projects.
Minister of state (IC) for power, coal, new and renewable energy, and mines Piyush Goyal said, “Railways have come out with a commendable plan called Mission 41K where they are looking at a saving of Rs41,000 crore through the electrification of railway lines."
“The decision to domestically source equipment is another positive move from Railways and will largely benefit the domestic industry," said Goyal.
The Indian Railways announced its 1GW solar target in 2015 and had achieved about 37MW of wind and 16MW of solar across railway operations until March 2017. The Railways has also tendered close to 255MW of rooftop solar projects, of which 80MW had already been awarded. In addition, the Railways is in the process of tendering about 250MW of land-based solar projects, of which 50MW have been awarded.
Arunabha Ghosh, CEO, CEEW, said, “Indian Railways’ ambitious renewable energy push will not only lower energy bills for the Railways but will also advance India’s climate goals and serve as a role model for low-carbon public transportation across the world."
“The Railway Board needs to pursue stronger collaboration with state governments and electricity regulators to establish a robust ecosystem for ensuring developer and investor confidence in its renewable project," he added.