Central Railway Pioneers Open Access Power, Cuts Costs by Rs 6,005 Crore

The Central Railway has taken a major step towards sustainable energy use by adopting open access power procurement, resulting in savings of Rs 6,005 crore over nearly a decade. An official on Thursday highlighted that the initiative has significantly reduced power costs and set a benchmark for Indian Railways.

Previously, Indian Railways relied on high-cost electricity supplied by state electricity boards or distribution companies (DISCOMs). To cut expenses, it implemented various strategies, including open access power procurement. This approach allows direct electricity purchases from power exchanges, independent generators, or through bilateral agreements, lowering costs substantially.

Central Railway pioneered this method within Indian Railways in 2015, achieving consistent savings each year. Starting with a modest Rs 161.20 crore in 2015-16, the savings increased steadily, reaching Rs 690.47 crore in 2024-25. These figures are based on the reduction from the earlier procurement cost of Rs 8.69 per kilowatt hour (kWh).

Open access power is a regulatory mechanism enabling businesses and institutions to source electricity from multiple suppliers instead of depending solely on local distribution companies. This system promotes cost reduction, flexibility in procurement, market-driven pricing, improved reliability, and a decreased reliance on a single energy provider.

A media statement from Central Railway stressed the numerous benefits of open access power, including optimized procurement, enhanced supply stability, and the opportunity to integrate more renewable energy sources into operations.

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