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Railways to sell surplus power in open market

Railways has been trying to find more ways to control its rising input costs.

Written by Avishek G Dastidar | New Delhi | Published: September 2, 2013 4:09 am

The cash-strapped Indian Railways has decided to sell its surplus power in the open market through its own power exchange. The Railways’ own power exchange is to be set up in a few months.

With its power bills mounting every year,and only around 40 per cent of the total electricity it buys for its train-running operations getting used in the daytime,the Railway Ministry along with its PSU,RITES,will get the modalities for the power exchange executed through the Power Trading Corporation to start selling its surplus.

“We use around 40 per cent of our total power requirement in the daytime and 60 per cent at night,leading to surplus electricity at our disposal at a time of the day when there is a peak in demand at power distribution utilities in states. We will now sell that power through the exchange,” Kulbhushan,Member (Electrical),Railway Board,told The Indian Express.

Railways spends around Rs 9,000 crore and uses a whopping 14.5 billion units of electricity every year. The conservative official estimate is that selling even 10 per cent of its surplus power will enable earnings to the tune of around Rs 900-1,000 crore every year.

Railways has been trying to find more ways to control its rising input costs. The rising cost of fuel has forced the ministry to review the Fuel Adjustment Component in its tariffs periodically to check the bleeding of its coffers. The next round of such a review is due in October.

Instructions have also been issued for the new metering system to find out the exact amount of electricity available to be pumped into the markets,which will be tapped by power distribution utilities.

Across India,Railways pays an average of Rs 5.50 per unit of electricity per contract. During the daytime,in the open market for electricity,where the rate is demand-based and dynamic,electricity sells at much more than that – sometimes at Rs 8 per unit.

On the other hand,at night,when Railways does require more power,the domestic grids are awash with electricity being sold at cheaper rates through the exchanges.

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