IEEFA Urges Indian Railways to Prioritize Renewable Energy Over Coal Freight Expansion

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A report by the Institute for Energy Economics and Financial Analysis (IEEFA) has advocated for a shift in focus for Indian Railways towards accelerating renewable energy generation instead of expanding coal freight by rail. The report underscores the potential for more efficient resource utilization and a more impactful role in bolstering the Indian economy through this redirection.

According to the analysis conducted by IEEFA, various governmental agencies in India have proposed plans to elevate coal freight transported by rail by a staggering 400 million tonnes within the next eight years. This ambitious target necessitates a spectrum of railway infrastructure projects, including the recently operational Eastern Dedicated Freight Corridor, with additional projects under active consideration by authorities.

Charles Worringham, a Guest Contributor at IEEFA and author of the report, emphasizes, “The prioritization of coal freight represents opportunity costs for both the Indian Railways and the nation at large. Shifting focus towards generating electricity from renewable sources and transmitting it through wires, rather than relying on coal, could empower the Indian Railways to play a more effective role in India’s evolving economy.”

The report advocates for continuous updates in railway infrastructure planning to align with evolving goals in renewable energy generation and improved electricity demand projections. Additionally, it highlights the diversion of financial and human resources toward developing coal evacuation infrastructure, limiting resources available for basic maintenance and upgrades on the general network, including vital projects like the Mumbai-Ahmedabad bullet train.

Highlighting concerns over network congestion, the report indicates that despite increased freight loads, freight train speeds remain stagnant. Furthermore, passenger train speeds have hit their lowest levels since June 2015, and during coal supply crises, passenger trains have been canceled to prioritize coal movement. This congestion issue could impede the transport of essential goods and services, ultimately affecting the railway network’s overall efficiency.

The report recommends prioritizing and incentivizing new renewable energy projects, particularly in regions distant from India’s coal-producing areas, citing the adverse impact of long-distance transportation on railway network congestion and resource allocation.

Stranded asset risks emerge as a significant concern regarding Indian Railways’ investments in coal evacuation projects. Worringham points out, “With most of the coal evacuation infrastructure planned in sparsely populated areas, a decline in coal demand due to escalating renewable energy generation could render these investments redundant.”

To mitigate these risks, the report suggests re-evaluating proposed railway infrastructure projects outlined in the Integrated Coal Logistics Plan. It emphasizes the need for realistic assessments of project timelines, costs, and considerations of India’s energy transition trajectory in the coming decades.

In light of these findings, the IEEFA report advocates a strategic redirection of focus by Indian Railways towards renewable energy generation to maximize resources and bolster the railway network’s efficiency in line with India’s evolving energy landscape.