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Making Indian Railways green

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Railway Minister, Suresh Prabhu.

The mammoth Indian Railways has agreed to meet some ambitious emission and sustainability targets set out at the climate change conference in Paris last year. Railway minister Suresh Prabhu will have to balance these commitments with profitability.

THE GREAT GREEN HOPE for the Indian Railways some six years ago was the jatropha plant. The plan was to extract oil from the jatropha seeds to produce biofuel. The idea was to move to cleaner fuel while reducing dependence on fossil fuels. There was even talk of biofuels fixing the country’s oil bill. Six years on, those grand plans are conveniently never spoken of, and it’s almost as if the jatropha tree itself has been banished from the Promised Land. Persistent questioning shows that the research done before investing in jatropha was not sufficient; the amount of water and care the plant needed was more than what the Railways was prepared for.

The country’s green dreams seem to be a bit like the ill-fated jatropha experiment. They are well-meaning, sure, but more often than not, they are short-sighted and badly researched. Which is why every time a government official says something about reducing emissions, it is generally greeted with indifference, if not scepticism. So, when the Railways issued a statement that it would reduce its greenhouse gas emissions by 32% by 2030, in line with the government’s promise at the United Nations climate change conference in Paris (called COP 21), there wasn’t much response from the public. 

Yes, there was the inevitable sense of deja vu. Added to that was the fact that the Railways has consistently refused to disclose its emission levels despite repeated international demands. The International Union of Railways, the global body for railway co-operation, asks members (including India) to declare their greenhouse emissions. The Railways has claimed that it does not have proper data and so cannot declare this. The natural question sceptics ask is that if the Railways can’t put a number on its emissions, how can it reduce them?

In line with the COP 21 promises, the Railways, particularly, is to reduce greenhouse gas emissions by 32% by 2029-30 from the 2004-05 levels. It means that the carbon dioxide emissions from trains (called “traction” in railway jargon) must come down from 10.3 tonnes of carbon dioxide per million gross tonne kilometre (GTKM), which is the total weight multiplied by kilometres traversed, to 8.3 tonnes.  

The other COP 21 target is to increase the Railways’ share of renewable energy sources to 40% in the next 14 years; the current level is below 5%. Equally optimistic is the target of increasing the amount of biodiesel in blended fuel to 20%. Railway minister Suresh Prabhu announced in the 2016-17 Railway Budget that the target for this year was 5% biodiesel; railway sources say the current level is 3.5%. That’s because there’s just not enough biodiesel available. 

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“We could acquire only 12 million litres of biodiesel last year, compared with the demand of 140 million litres for 5% blending,” says Hemant Kumar, member mechanical, Railway Board. This is where the jatropha experiment could have helped; instead, the Railways is looking at diesel from other plant sources such as karanja, as well as animal fat. There is no information available on the status of these experiments.

Even targets not linked to the Paris accord seem impossible to achieve. For instance, there’s the plan to recycle 200 million litres of non-potable water in the next three to four years. Currently, the Railways recycles around 12 million litres at its 40-odd recycling plants. “We will have to move very aggressively at this point because it will involve setting up another 100 to 150 more recycling plants [that will have a capacity of up to 1 million litres],” says K. Swaminathan, advisor, environment and housekeeping management, and head of the recently set up three-member Environment Directorate of the Railways. 

While the Railways does announce occasional steps taken to reduce emissions and generally go green, it has never really publicised its plans. There have been occasional news reports about trains running on solar panels or about fuel-efficient engines. Most of the reports are to do with trains; there has been very little about sustainable procurement. In the absence of a holistic plan, it seems depressingly likely that India will not be able to meet its COP 21 targets. 

So, does this mean the Railways will continue chuffing out harmful gases, that it will pollute the countryside with solid waste, and that it will use polluting fuels? Not if the railway minister has his way. Like a few of his predecessors, Prabhu is seen as someone bringing fresh thinking to a relatively moribund ministry. His good track record as a power minister in the earlier National Democratic Alliance government adds to his aura. (Acknowledging his previous key role in the power sector, the NDA government since returning to power in May 2014, has appointed him as the head of the Advisory Group for Integrated Development of Power, Coal and Renewable Energy, a high-level panel on revamping the power sector.)

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Green Curtain: There are ambitious plans for afforestation on surplus Railway land.

Historically, the Railways has been used by the party in power to dispense political largesse (factories, new trains, and new routes). Prabhu, however, doesn’t seem to have given in to political pressures. His focus areas, so far, seem to be on profitability, and making the Railways way greener, both in “traction” and “non-traction” areas.

Traction, as far as the Railways is concerned, refers to trains—what’s on the tracks. Non-traction is everything else, from stations to yards to power lines. The big question for Prabhu is whether the desire to go green outruns the Railways’ capability and resources. I spent weeks at Rail Bhawan, the Delhi HQ of the Railways, meeting bureaucrats and Railway Board members and other officials, trying to understand where practicality meets ambition.

IN TYPICAL GOVERNMENT fashion, one of the earliest things done by the Railways was to set up a series of committees and panels, all of which were to recommend specific steps that would allow the Railways to reduce emissions, and conserve energy and other scarce resources. One such is the long-term (2010-2032) Energy Efficiency and Conservation Programme. This programme aims at progressively introducing a number of energy-efficient technologies and measures in the rail system.

Other measures in the traction space, suggested by consultants, can bring down energy consumption by at least 20%. These steps include far more efficient electrical systems in trains; lower-capacity direct current engines; regenerative braking, where the energy generated during braking is returned to the engine; tweaking engines to reduce the amount of energy needed to start or run the train; and hybrid traction, where batteries are used to store energy.

In non-traction, the steps include some obvious suggestions, such as use of energy-efficient/ inverter-based air-conditioning systems; replacement of CFLs with LED lights; use of energy-efficient ceiling fans, and replacement of old energy compressors with energy-efficient ones. “These non-traction measures can save 30% to 40% of the total non-traction energy consumption,” explains Amit Kumar, partner at consulting firm PricewaterhouseCoopers, which works closely with the government. 

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That sounds way more positive than anything I’ve heard so far. But then, I correlate this with the Vision 2020 document the Railways drew up in 2009, and suddenly things don’t seem so positive. The document details the Railways’ plan to achieve its 2020 target of electrifying 33,000 km of existing tracks, and 25,000 km of new lines. Which means a significant increase in energy consumption in the next four years; officials say the total fuel consumption is likely to go up from 2,780 million litres in 2013-14 to 6,263 million litres by 2029-30.

Add to this Prabhu’s plan to reduce costs by using more electric engines to carry passengers and freight. India has already moved to running 51% of passenger trains and 63% of freight trains on electric traction.

At the same time, Prabhu is also trying to lower electricity costs (35% of total fuel costs) by bidding out for medium-term (three-year) power supply contracts in the open market. The first such agreement for supply of 50 MW was signed with Adani Power (the winner out of seven bidders) in 2015 at Rs 3.69 per unit, a 45% discount to the current costs of Rs 6.75 per unit paid by the Railways to state utilities. Tenders have already been floated for another 585 MW, while sources say that there is a tie-up with NTPC in Maharashtra for another 500 MW (at Rs 4.70 per unit.)

The entire plan to reduce energy consumption seems Sisyphean, as the demand for energy is always likely to be greater than any savings. Also, while increasing the use of electricity may bring down harmful emissions, the fact is that electricity itself, generally produced from coal, is not a sustainable option.

Which is why the other COP 21 energy target makes sense: that the Railways increase its use of renewable energy to 40% of the energy it consumes. That, admit Railways insiders, could be the biggest challenge. But that’s off the record. On record, they point to the fact that the Railways already produces some 10 MW of solar power. It plans to set up solar power plants to generate 1,000 MW in the next five years. The power plants include solar panels installed on top of railway stations (a 1 MW  rooftop solar panel is already functioning at the Katra railway station in Jammu), railway buildings, and on solar parks on railway land. (Aside: Rail Bhawan, says one of the bureaucrats I’m meeting, generates nearly 30 KW of energy from the solar panels installed on the roof.)

I’m openly sceptical about the huge increase in solar power generation. That’s not the Railways’ prime focus, and it may be better to outsource such businesses. The official line is that the targets will be met; the solar power plants will be set up in phases. In the first phase, 50 MW of solar power will be generated by the end of this financial year. Bidding has already happened and there is a good response, say officials in the ministry. There are seven or eight bidders for each contract from 1 MW to 4 MW. The winning bidder will set up a plant and run it for 25 years and the railway ministry will pay for the power. Officials are certain that the tariff will be far lower than the present cost of Rs 6.75 per unit of electricity.

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SOLAR POWER: One of the ways the Railways can 
save money is by opting for solar power.

WHY CAN'T THE Railways aim to become the largest and the most resource-efficient and sustainable railway network in the world?” demands Arunabha Ghosh, CEO of the Council of Energy, Environment and Water (CEEW), a not-for-profit policy research institution.

It’s not entirely fair to say that the Railways is ignoring sustainability, although it’s true that a lot more needs to be done. For instance, there’s a huge afforestation drive on, where surplus Railways land is being used to grow trees. At the same time, little seems to have been done on the much-talked-about “green curtain” of trees planted by the side of railway tracks.

Then, there’s the pollution control aspect. The Railways announced that it had advanced the target of zero discharge from trains by two years—to 2019—by planning to instal an additional 1,40,000 bio-toilets, developed jointly with the public sector Defence Research and Development Organisation. “By 2030, nearly 50,000 to 55,000 coaches will be fitted with nearly 2 lakh to 2.2 lakh bio-toilets in the country. So every coach will be zero discharge in the future,” says Swaminathan.

According to a recent study by CEEW, the total waste generated from 75 A1 category stations—those with nearly 1 lakh footfalls every day—and 330 A category stations (50,000 footfalls), and  a few hundred smaller stations, a total of 8,000 stations generate around 6,700 tonnes of waste. That’s per day. Clearly this is a big problem.

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The answer is to set up waste-to-energy plants; a 5 tonne plant has already been commissioned at the Jaipur station, and it produces gas that is used to run the canteen. “We are saving one gas cylinder every day because of this plant,” boasts Kumar of the Railway Board.  “In the case of the 15 tonne waste-to energy plant in Delhi, the tenders have already been given out and the plant will become operational in the next six months,” adds Swaminathan. Such plants will be set up in other stations as well.

The challenge of managing waste-to-energy plants will be resolved by giving out the contracts to the private sector on a build-operate-and-transfer model and the payment will be made depending on the final product, whether it is just gas or electricity, says Kumar. Such plants will also be set up in other platforms.

THERE ARE OTHER steps that the Railways is already taking in its bid to become a sustainable organisation. For instance, implementing the efficient three-phase insulated-gate bipolar transistor  (IGBT) technology in trains is on the cards. “If this technology, which is currently installed only in 7% of the trains, were to be used in the Mumbai suburban trains, it could immediately reduce emissions by 600 tonnes of carbon dioxide per train per annum because of the regenerative braking feature,” says Sanjay Kumar, additional general manager, Dedicated Freight Corridor Corporation, a 100% subsidiary of the Indian Railways.

This will also help the Railways gain a higher share of the transport sector—from the current 35% to 45% by 2030, which it has lost to the road sector over the years because of a host of faulty policies, including “under-investment in Railways”, hiking freight fares steeply to subsidise passengers, etc.

The Railways is banking on the 10,122 km Golden Quadrilateral Freight Corridor, which will be commissioned by December 2019, to win back some of the traffic it lost to roads; trains on these routes already run at 120% to 140% capacity. The freight corridor is expected to carry nearly 70% of the total freight traffic of the railways on these routes.

The change in transportation pattern will also have its impact on the consumption mix. Electricity usage is expected to grow from 14,410 million units (read kWh) in 2013-14 to 22,278 million units in 2019-20 and further to 39,421 million units by 2029-30. Diesel consumption, on the other hand, is likely to grow at a much slower pace from 2,780 million litres in 2013-14 to 3,921 million litres in 2019-20 to 6,263 million litres by 2029-30.

However, what is heartening is that an internal report of August 17, 2015, entitled “Intended Nationally Determined Contribution Targets for Ministry of Railways’’—a target that the Ministry of Railways set for itself at the Paris meet—projects a steady decline in both energy and fuel intensity,  calculated in kWh per 1,000 GTKM over the years. The report predicts a gradual reduction in passenger energy consumption intensity from 18.9 in 2013-14 to 18.5 in 2019-20 to 18 in 2029-30. Similarly, fuel consumption intensity is slated to go down from 2.19 litres per 1,000 GTKM in 2013-14 to 2.11 in 2019-20 and finally to 2.03 by 2029-30. But all this will come at a cost. Reducing energy consumption will cost Rs 1,700 crore; changing the fuel mix will cost another Rs 1,600 crore.

THE BIG CHALLANGE for Prabhu is financing all these steps. The minister has started some innovative forms of funding, including getting the Life Insurance Corporation to extend a $25 billion (Rs 1.6 lakh crore) loan for financing the expansion of 24 congested corridors.  Secondly, 8,000-plus stations are being put up for development through the public-private partnership route, with land exploitation being chosen as the route for payment. Third, new business models (discount on rail fare) will be considered to fund last-mile connectivity.

Amit Kumar, partner at PwC, says that Prabhu will have to figure out how to raise the billions of dollars needed to develop the Railways overall. Apart from the three steps already detailed, railway officials are talking to the World Bank and Asian Development Bank to raise money. Kumar also suggests that the Railways should try to  increase its revenue sources. That means taking politically unpopular steps such as raising fares and freight rates. “Some of the assets that are unproductive at this point of time will have to be converted into productive ones,” he adds.

Swaminathan of the Railway Environment Directorate adds that neither the Railway Budget “or any other document allocates any fund for sustainability or its greenhouse gas emissions reduction programme”. He says that the ministry was only recently allowed to fund “certain projects of the zonal railways from the 2% CSR that public sector organisations and corporates will have to keep aside from their profits”.

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The Railways can also make money from the power it generates. Under the Indian Electricity Act of 2003, no company is allowed to generate, distribute, and consume and transmit its own power. The Railways has taken advantage of a loophole, that the Railways Act was enacted prior to the Electricity Act, and could not have anticipated this provision. After a long legal battle, the Railways won the case last financial year. This means the Railways can function like an independent power producer. It has the power to renegotiate with the state electricity boards in terms of tariff: Either you bring down the rates or I have the option to generate or consume the power or change the supplier.

Equally, if not more, important is the fact that the Railways has its own budget. So, theoretically, it’s possible that the Railways can raise large amounts through bonds and debt, but it will have to service those debts. “And you can only service your debts if you are profitable—that is the real challenge,” 
says Kumar. 

What about raising money from institutions like the World Bank, I ask. “Of course, the World Bank gives you low rates of interest—these multilateral agencies give loans to organisations like the Railways at 8% to 8.5% interest,” says Kumar. Isn’t that better than raising the money from the markets at a 12% to 13% interest rate? Kumar laughs. “Even if the World Bank gives you money, they would want to know how you will repay...The servicing of the debt is an issue for which they will have to generate more revenues.”
Raising revenue involves raising tariffs. As mentioned earlier, the Railways is generally seen by the government as a tool to dispense largesse, and rarely as a way of making money. Successive governments have left passenger fares untouched, making it impossible for the Railways to have the financial resources to make investments to improve its services. 

All of which leaves the Railways’ sustainability initiatives hamstrung. I ask Kumar whether all the green moves (including meeting COP 21 commitments) are practical and achievable. He says “the figures seem achievable and correct”. However, he adds that there seem to be some problems with how the government and the Railways define their COP 21 commitments. “While the government says that 40% of the installed capacity will come from non-fossil fuels, which include hydel and nuclear power, the Railways only talk of renewable power.”

Another point that comes up is the fact that the 32% reduction in emissions is calculated in terms of capacity installed and not in terms of units generated. 

“What they [the government] have tried to project is how much of the total emission will come down if we take these steps. All the actions—whether it is use of renewable or CNG/ LNG instead of coal or diesel—will result in decreased carbon dioxide emissions because they are also clean fuels. Since we know how much greenhouse gas emissions are being released into the environment, it is easy to calculate the reduction in emission when these fuels are replaced by cleaner ones,” adds Kumar.