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IEEFA Report Urges Indian Railways to Prioritize Renewable Energy

The report recommends a strategic shift towards accelerating renewable energy generation instead of expanding coal freight.

December 14, 2023. By Abha Rustagi

The Institute for Energy Economics and Financial Analysis (IEEFA) in an analysis underscores the potential for Indian Railways to optimize resources and enhance its role in the nation's economy. 

The report recommends a strategic shift towards accelerating renewable energy generation instead of expanding coal freight, citing significant opportunity costs.

The study delves into government forecasts, revealing plans to increase coal freight by at least 400 million tonnes over the next eight years. Ongoing rail infrastructure projects, including the recently inaugurated Eastern Dedicated Freight Corridor, align with these goals, with more projects under consideration.

Charles Worringham, Guest Contributor at IEEFA, emphasizes the opportunity costs associated with prioritizing coal freight. "A renewed focus on generating more electricity from renewable sources and moving it over wires rather than in the form of coal would help the Indian Railways play a more effective role in India’s changing economy," he states.

The report recommends continuous updates to railway infrastructure planning, considering evolving renewable generation goals and electricity demand outlooks. It highlights the diversion of resources towards coal evacuation infrastructure, impacting human and physical resources for vital maintenance and upgrade work.

Concerns about network congestion resurface in the report's analysis of recent data. While freight loads have increased, train speeds remain stagnant. Non-suburban passenger bookings are at 83 percent of 2019 levels, with passenger train speeds at their lowest since June 2015. The report notes passenger train cancellations during coal supply crises and increasing wagon turnaround times.

Worringham underscores the importance of network capacity in an expanding economy, expressing concerns about constraints due to coal freight expansion. The report advocates prioritizing renewable energy projects in regions distant from coal areas to mitigate negative effects on railway network congestion.

Highlighting stranded asset risk, the report points to concerns over investments in coal evacuation projects, mainly concentrated in India’s least populated areas. As renewable energy gains prominence, the report calls for a re-evaluation of the proposed railway infrastructure, considering realistic timelines, costs, and India’s progress in its energy transition.
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