Quantification of savings in fuel expenditure by various means and evaluating operational cost of electric traction over diesel traction for Indian railways

Abstract

Indian Railways is the life line of the nation, carrying approximately 2 Crores people per day and 1000 billion tons freight per annum. It offers variety of services such as short distance (sub-urban) passenger services, long distance passenger and freight services. Indian Railways carries 30.9% of world railway passenger kilometers and 5.4% of freight tonkilometers.Indian Railway has 65,000 route km networks out of which 24,800 route km of high density tracks have been electrified. Indian Railways is the energy intensive sector consuming 18 billion units (~2% national consumption) of electricity and 2.6 billion liters (4% of national consumption) of diesel for transportation purpose. Indian Railways carries 66.5% of freight traffic and 51% passenger traffic on Electrified traction and rest is carried by Diesel traction. Indian Railways energy consumption is increasing at the rate of 8.9% per annum and fuel expenditure is growing at an average of 13.2% from 2002-02 to 2012-13. Fuel expenditure increased from 22% of working expenditure in 1999-2000 to 30% in 2014-15 and Railways operating ratio is 92%, which is real concern for Indian Railways on date. In this paper, we discuss the increasing trend of electricity energy consumption and diesel consumption of Indian Railways over a period of time. The growth rate of fuel expenditure is higher than the growth rate of fuel consumption, eating away higher percentage of Railway earnings year-on-year. Further to this State Distribution Companies are charging railways at very high tariff, in spite of being bulk consumer Railways is losing money on account of higher tariff by State Electricity Boards/Distribution Companies. We will try to quantify the possible savings in fuel expenditure of the Railways due to various available options such as Open Access, Power Trading, Bilateral Agreement, and Joint Venture with Power Generators Evaluating as option Electric traction over Diesel traction. Open Access developments in various countries and India are being discussed, how open access is facilitating the consumers with reliable power at lower tariff. Importance of power trading in electricity market of other developed countries and India is compared to evaluate the choice of Open Access and Power Trading for Indian Railways. Consumers availing power through Open Access at much lower price than national average electricity price and hence the possibility of Railway opting for Open Access along and power trading and resulting savings are quantified to appreciate the option. Scope of Railways to negotiate on tariff through Bilateral Agreement and Joint Ventures with Power Producing Companies is discussed with prior examples and existing status quo. Whether can railway have its own power generation for its requirements? Does it have such experience to explore the option? Historical performance in maintaining power station by Indian Railways has been very disappointing. The most important part of this paper is evaluation of Electric traction over Diesel traction. Diesel traction contributing to 70% of fuel expenditure and hauling only 33% freight traffic and 48% passenger, whereas Electric traction hauling 67% freight and 51% passenger traffic contributing only 30% of fuel expenditure. Likely savings for Indian Railway with Electric traction being used for traffic movement rather than Diesel traction is quantified to support the argument. Finally above five options ranked based on various measure such as cost effectiveness, ability to implement, capital requirement, environment friendly, efficiency and reliability. Recommendations are made on the basis of the policy analysis for reduction in the fuel expenditure of Indian Railway. Open Access and power trading have to be adopted immediately to access the electricity at lower tariff. Many private firms are availing power through open access on date. Bilateral agreement is the next best option to get reliable supply from the potential power generation company. Promotion of electric traction and gradual withdrawal of diesel traction could result in enormous saving in various fronts. Low environmental pollution and high speed, efficiency, energy conservation are inherent advantages through Railway Electrification.