Indian Railways starts procurement of power in Punjab as deemed licensee instead of consumers

The Indian Railways on Tuesday said it has commenced direct procurement of power for Northern Railway as deemed licensee instead of the consumers. Moreover, the Indian Railways is now taking about 70 per cent power under the open access as deemed licensee in 11 states.

According to an official release, the Indian Railways have been embarking upon various initiatives to reduce the cost of operations. One of the major initiatives in this regard has been direct procurement of power as deemed licensee instead of the consumer.

"Mission 41K" document targets for saving of Rs 41,000 crore through integrated Rail Energy Management System by 2025.

Railway Energy Management Company Limited (REMCL), a JV of Ministry of Railways and RITES Ltd., has been endeavouring to achieve this target by gradual migration from consumer to the deemed licensee.

Deemed licensee status enables Indian Railways to buy electricity directly from any generating company by paying wheeling charges to central and state transmission system under open access as per the Electricity Act, 2003.

In this sequence, Indian Railways has commenced flow of 35 MW power in Punjab for 11 traction sub-stations with effect from November 24, 2019, which will result into annual estimated saving of Rs 56 crore per annum on a recurring basis.

With the addition of Punjab in the portfolio of open access, Indian Railways is now taking about 1400 MW (70 per cent) of power under open access as deemed licensee in 11 States.

These efforts are resulting in an annual saving of over Rs 3,500 crore per annum and a total saving of over Rs 12,000 crore since the commencement of power under open access with effect from November 2015 onwards on business as usual mode.

These initiatives will pave the way for reducing the financial burden of Indian Railways. These efforts have resulted in keeping electricity price at most economical rate on sustainable basis since 2015 on Indian Railways.