A lot of emphasis is given to Railway Electrification in recent years with a view to reduce the Nation’s dependence on imported petroleum-based energy and to enhance the country’s energy security, with a vision of providing eco-friendly, faster and energy-efficient mode of transportation.
During the last five years, total 204 electrification projects consisting of 30490 RKM have been sanctioned by the Government of India and keeping in mind the significant cost savings and considerable reduction in carbon footprint. Also, the stats show that the fuel expenditure for electric traction is just 37% of total fuel expenditure of Indian Railway, this is a major parameter of the economic benefits associated with electric traction.
Post 70+ years of independence India has been able to add to railway network impressively but the extent of electrification trails, resulting in close to 60% of the entire network length of country being electrified. But the advantage of this electrified network is that it accounts for 55% of passenger traffic and 65% of freight traffic for the Indian railways at only 37% of the total fuel bill incurrence. Hence, the need for full electrification has been long felt and is regarded as a game-changer in pushing railways further to handle greater freight tune as well as passenger traffic with enhanced speed and lowered fuel expenditure.
This has pushed the GoI to have an ambitious plan in order to secure the required infrastructure for full electrification in the railway network of the country by 2024. In 2018-19 the railways had consumed about 18 billion units of electricity and with 100 percent electrification and the rail traffic projected to grow, it is estimated that the Indian Railways would be consuming around 28-30 billion units of electricity for its traction requirement.
Thus, this shall open up great opportunity galore for both conventional and renewable power generation players as the business rationale for railways favors either direct power purchase or setting up its own captive infrastructure. In either of the cases, EPC players shall have another set of opportunities being generated for their businesses.
Business Case for Railway Electrification in India
- Government of India plans to fully electrify the balance 42% network till 2024
- Close to 30 billion units of electricity shall be required for railway electrification on annual basis by 2024 leading excellent opportunities for IPPs of conventional power
- Direct power purchase agreements likely to go up with more solar & wind power installations coming up may supply directly for railways
- Overhead line equipment suppliers to gain massive opportunities to supply for the equipment like conductors, transformers & insulators etc.
- Sub-station capacity to enhance leading for opportunities for transmission & distribution utilities
- EPC contractors shall have multitude of opportunity in terms of infrastructure creation for railway electrification
- Opportunity for rolling stock companies shall be massive, electric locomotives shall gain pace
- OEM’s shall have greater opportunity coming their way in terms of equipment supplies & order
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