The Central Railway has taken significant steps towards promoting green energy, revolutionizing its power procurement methods, and achieving major savings in the process.
On Thursday, an official revealed that the Central Railway had saved over Rs 6,005 crore in nearly a decade through the pioneering use of the open access method for power procurement.
In the past, Indian Railways relied heavily on state electricity boards and distribution companies (DISCOMS) to meet its energy requirements, often paying high tariffs.
To reduce its energy expenditure, the Indian Railways adopted various cost-cutting strategies.
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A key approach was the introduction of open access, a regulatory mechanism that allows organizations to purchase power directly from cheaper sources like power exchanges, generators, or bilateral agreements.
The Central Railway was the first Indian Railways zone to implement open access for power procurement in 2015, setting a benchmark for cost-effective and sustainable energy use.
Since then, it has consistently saved substantial amounts, from Rs 161.20 crore in 2015-16 to an estimated Rs 690.47 crore in 2024-25. These savings were calculated by comparing the actual power procurement cost under open access with the earlier procurement cost of Rs 8.69 per kWh (kilowatt hour).
Open access provides several advantages, including reduced costs, flexibility in procurement, and access to a broader range of power suppliers.
It allows businesses like Indian Railways to purchase electricity from multiple sources, leading to optimized energy usage and better market-based pricing. Moreover, it increases the reliability of the power supply by reducing dependence on a single energy provider.
A media statement from Central Railway highlighted the key benefits of this method, noting, “Open access has led to cost reduction, better procurement flexibility, and improved energy optimization, with increased reliability and a diverse range of energy sources available.”
The Central Railway’s success in using open access not only contributes to cost savings but also supports its commitment to green energy and sustainability.
By tapping into cheaper and renewable energy sources, the railway system is aligning its operations with environmental goals and reducing its carbon footprint.
As the first zone to implement open access, the Central Railway’s initiative is paving the way for other sectors of Indian Railways to adopt similar strategies, ultimately driving cost savings and supporting the transition towards more sustainable energy solutions.
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