Rlys aims to save Rs 41,000 cr in power bill in ten years

The Indian Railways aims to save Rs 41,000 crore in 10 years in its spending on electricity by procuring power directly from producers under open access arrangement.

The national transporter already achieved a cumulative saving of Rs 5,636 crore from April 2015 to October 2017 through direct procurement of power, instead of Business As Usual (BAU).

The open access policy under the Electricity Act, 2003, allows consumers with electricity load above 1 MW to procure power directly from generators, electricity exchanges or through bilateral arrangements. In BAU system, the power is procured from electricity distribution companies. The cost of power procured from BAU is always higher than that through open access arrangement.

Earlier, though the Railways used to get power from respective state electricity distribution companies for its electric traction under BAU arrangements, the Central Electricity Regulatory Commission in November 2015 had allowed the national transporter to undertake transmission and distribution of electricity as a deemed licensee under the Electricity Act.

"This order helps the Railways to procure power directly from producers or electricity exchanges," said an official. If the Railways keeps saving its spending on power the way it saved in 2015-2017, it can save about Rs 41,000 crore in 10 years, the official said.

The Railways currently sources power through open access route in seven states - Karnataka, Maharashtra, Gujarat, Madhya Pradesh, Jharkhand, Rajasthan and Haryana - and Damodar Valley Corporation area.

Five more states - Bihar, Uttar Pradesh, West Bengal, Tamil Nadu and Telangana - have also agreed to permit the Railways to source power though open access route which is likely to start next year, said the official.

"The electricity procured from open access arrangement costs Rs 5 per unit against Rs 7 under BAU mode. The money thus saved will be used on electrification of the rail network as part of Mission Electrification. More electrification means less spending on diesel," the official said.

The Railways consumes around 2.8 billion litres of diesel a year, costing Rs 18,000 crore, and 17.5 billion units of electricity.

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