Decarbonization of Indian Railways: Assessing and Balancing Costs and Policy Risks

This report analyzes the economic viability and technical requirements for the 100% decarbonization of Indian Railways' (IR) traction electricity demand, focusing on a case study in Madhya Pradesh. It concludes that a mixed wind and solar energy strategy is the most cost-effective approach, projecting that decarbonization will be 26-28% cheaper than business-as-usual by 2030.

• In Madhya Pradesh, 100% decarbonization of Indian Railways' traction electricity demand is projected to be 26-28% cheaper than the business-as-usual pathway by 2030. This transition is expected to be 27-38% more expensive in 2016-17 and 2-5% more expensive in 2022, with costs decreasing as renewable energy prices fall and fossil fuel costs rise.
• A mixed wind and solar energy strategy is recommended to minimize balancing costs, which are expected to account for 5-8% of total decarbonization costs by 2030. In contrast, an all-solar scenario would see balancing costs spike to 63-78% of total costs, as the proportion of balancing electricity units required would increase from approximately 4% (0.4 million units daily) in a mixed scenario to about 58% (6.2 million units daily) in an all-solar scenario.
• To meet electricity demand, Indian Railways would need total installed solar and wind capacity approximately six times its demand, with wind capacity needing to be roughly eight times higher than solar capacity to keep costs and balancing needs low. However, wind seasonality in India creates significant variability, with capacity requirements varying from -19% to +32% between the worst case (October-December) and best case (May-September) scenarios.
• Indian Railways faces several policy and regulatory risks, including the lack of a suitable power banking arrangement and a lack of recognition by states regarding IR's status as a deemed transmission and distribution licensee. Other risks include delays in the development of a national balancing market and a framework for the inter-state sale of renewable energy.

APA

Climate Policy Initiative (2017). Decarbonization of Indian Railways: Assessing and Balancing Costs and Policy Risks. https://www.climatepolicyinitiative.org/publication/decarbonization-indian-railways-assessing-balancing-costs-policy-risks/

Chicago

Climate Policy Initiative. Decarbonization of Indian Railways: Assessing and Balancing Costs and Policy Risks. 2017. https://www.climatepolicyinitiative.org/publication/decarbonization-indian-railways-assessing-balancing-costs-policy-risks/.

Wikipedia

{{cite report |author=Climate Policy Initiative |title=Decarbonization of Indian Railways: Assessing and Balancing Costs and Policy Risks |date=4 April 2017 |url=https://www.climatepolicyinitiative.org/publication/decarbonization-indian-railways-assessing-balancing-costs-policy-risks/ |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{climatepolicyinitiative2017decarbonization, author = {{Climate Policy Initiative}}, title = {{Decarbonization of Indian Railways: Assessing and Balancing Costs and Policy Risks}}, institution = {Climate Policy Initiative}, year = {2017}, month = apr, url = {https://www.climatepolicyinitiative.org/publication/decarbonization-indian-railways-assessing-balancing-costs-policy-risks/}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }