April 5, 2017

Speaking on “Decarbonising the Indian Railways: Scaling Ambitions to 5 GW of Renewable” New Delhi

But it’s certainly possible, I don’t believe that anything is impossible and I am glad that the railways is thinking big, it’s thinking bold. And it’s beautiful to see the enthusiasm that Mr Prabhu has and the way the whole railway system is geared up to look at powering the railways in a more efficient manner. I believe the workshop is looking at 5 GW potential for railways. Actually, it’s not difficult. I don’t see any great difficulty in achieving that. I think they have about 8,500 odd railway stations.

The Katra experiment has been extremely successful. The honorable Prime Minister himself inaugurated it. You have announcements of a large number of railway stations soon going to be powered by solar. And, in the railways you need power even during the day time, so generating power through solar makes eminent sense. You have the offices there and you have the facilities for providing clean drinking water, the shops, the, I don’t know if the coaches when they come there could also in some way benefit from that power, something which you all can discuss during the course of the day.

But, most importantly, railways has a lot of land which is under encroachment now or some of it is under encroachment, and which is a potential for further encroachments. And, to my mind, there can be no better solution and no amount of policing can save the railway line from encroachment, particularly, since it’s spread out all across the country. In Mumbai, they must have lost very very expensive real estate to encroachment. But just imagine for a moment, if all of that land could be used for solar installation, whatever land the railway has, including the land where they have started a project which is stalled either for lack of funds or for lack of the entire right of way. So they have bought land in stretches and I don’t know whether you are aware there are projects which as a legacy we inherited, announcements made as long as 1975, 40 years ago, which have still not been completed, many of them for lack of the right of way through the stretch of the railway and other reasons.

This government, of course, has stopped announcing all new projects. We are trying to focus to get this legacy sorted out, get these projects into operation so that they can serve the people of India, they can start transporting passengers, freight, earning some revenue for the railways. And, in that sense, it’s very efficient management of the railways that we have seen honourable Minister Mr Prabhu and before him Mr Gowda run. But if we could put solar panels on this land, moving these solar panels at any point of time when they need to actually use that land is no big deal. Some of you could possibly guide us what would be the cost of moving a solar panel from one to the other place, and what would be the saving in terms of policing that land, potential loss of land, potential cost of rehabilitating those who have encroached railway land, maybe an exercise which you could do during the course of the day.

But clearly, 5 GW is not difficult. I can’t mandate it, but I do hope the railways will only use domestic equipment for powering their requirements and absolutely not allow any imports to come in. Modules, of course, we have enough capacity; cells, I am trying to encourage people to set up more capacity. It’s a chicken and egg story, once they see visibility of business and demand, I am sure more investment will come in. And as we get polysilicon wafers into the country, we will, of course, make it compulsory to use only domestically produced wafers also.

So, you are from the railways gentlemen? I do hope you will make sure that absolutely not a single rupee of business, irrespective of price, even if it is slightly more, goes to any imports. The CPSU should only use domestic equipment, particularly, after all that has happened in the last few months, I won’t repeat that. It’s important that we support our domestic industry and I think the whole world is looking at it now, so we don’t need to be apologetic about it. In fact, yesterday I was talking to the honorable Commerce Minister late last evening for that matter, and it’s food for thought for any of you who would like to research it, maybe you could help me research it. Areas where other countries do not allow India to participate, I believe we should not allow those countries and their companies to participate in India. So there are certain countries which came to my attention recently, actually, people should stop taking appointment from me and coming to meet me because it costs them dear. A company from a particular country came and met me saying that they want to invest in India and invest in a certain sector of the power value chain. And in the course of conversation, I casually asked him, what country can PGCIL also invest because I am looking for more frontiers for our PSUs to invest. And he said no no, our country doesn’t allow investment from other countries in this sector. And since then I have been struggling that we have to make sure that this stops in India. And we are not like with our, there are ladies here so I can’t use the right expression.

And I am often misquoted, I am actually I am being, my colleagues keep telling me – talk less, talk less. But honestly, would all of you not agree with me when I say this? And then I had instructed my office they set up a committee and they are good at committees, every government is good at committees. Fortunately, yesterday I was signing, रामनवमी का देखो कितना लाभ हो गया मुझे, भगवन राम भी देखते रहते हैं हमारे काम को इसलिए हमें भी उनका चिन्ता करनी चाहिए मुझे लगता है, है कोई मीडिया यहाँ पर?

But I was doing my questions and there was an answer to a question in which that particular topic was being addressed. And in the election I saw there are some bids where the same companies have bid. And I immediately called up the Power Secretary; I said why have you not taken action as yet. He said a committee is looking at it and I have talked to other colleagues, it’s a little difficult, how can we stop any country from investing when there is 100% FDI in that sector. I said what non sense, we have to stop it. So I called up the Commerce Minister and that’s what has set the chain going. And I think this is how India should protect our domestic industry, should encourage our domestic industry, and try to bring level playing field wherever in the world we are discriminated against. We won the UP elections, by the way, with a large political plank being no discrimination of any sort. And I think the same applies to international trade.

You can’t have a situation that a particular country comes and files a complaint against us for helping our domestic industry and then do the same in their own country. So these are areas in which I have very strong views. All those who are here from the railways, please make sure it’s 100% domestic procurement because you are using it for your own requirement, CPSU requirement, there is no restriction on supporting domestic industry.

Now with the prices so low, balance of plant equipment also largely Indian, if there is anything which is not Indian I told you guys to tell me what more do we need to do to have the BOK equipment totally indigenous. Now the solar piece has become very small, as I discovered from the recent bids. So I think it’s very much eminently doable that even if it is a, slightly cost more, we make sure that domestic industry gets a leg up and we see more and more empowerment of the domestic industry.

The railways also has embarked on a excellent programme to accelerate the electrification of railway lines, which also will bring down the energy cost significantly. I believe you have some programme called 41K, say 41,000 crores, एक 0 और add कर दो, कुछ और सोचो, अभी 2 रुपये में अगर बिजली मिलेगी | But diesel is another area we have to put an end to, it’s certainly not doing us any good. We are importing petroleum products and we have so much sun, wind, water in the country. Let’s try and expand the footprint of renewable, it’s good for the country; it’s good for the next generation. All these young kids here I am sure want us to save the planet and save the world for them. So let’s all of us contribute in that. Of course, I must compliment you Arunab, you are doing a excellent job. Your think tank I believe is rated amongst one of the most independent and well managed think tanks, so I must compliment you and all your colleagues for the good work you are doing in my sector. Of course, I have a complaint, I tried to get him, win him out of EEW, CEW and come and work for me. But he refused. But then you are doing good work in your organisation and please continue to do that.

In terms of the sector per se, I believe the railways has planned a far more efficient utilization of sources for their energy. They have now also supported the Ratnagiri Power to restart, and I must thank you and all your colleagues and please convey to Sureshji my grateful thanks. Because before 31st March, which we had expected and planned, the railways has agreed to buy 500 MW of gas-based power from the Ratnagiri plant, so that that power plant also can stand on its feet. It will support the LNG terminal restart and then expand the LNG terminal so that LNG becomes an independent business vertical, working profitably and the power plant gives them enough power so that the auxiliaries that are required to run the LNG plant. My God, at this speed I could to probably apply for an engineering degree. I hope I don’t forget my finance. But I have to ………….

But it’s really been an example of how we can support each other, work as a team, break the silos between different departments and Ministries in the government. And the revival of the RGPPL is one very very good initiative and example of how different Ministries – the Ministry of Railways, the Ministry of Petroleum and Natural Gas, the Ministry of Power, the Ministry of Environment, the Ministry of Finance – all worked as one team to protect investment in India, protect jobs in India, restart a project that otherwise would have caused severe stress to the banking sector which would have caused job losses, which would have actually derailed an initiative to support the gas-based power plants. And I must thank railways because that was an important pivot for achieving this success story.

Today I read in the paper something about the gas-based power plants not restarting. I will take this opportunity to just let the people know. We did support the gas-based power plants for 2 years, but towards the last 6-8 months, nobody was buying power from them. Now this is where a virtuous act becomes a vice or a …… around your neck. And I thought bringing down power tariffs and power price in the country was a virtue, and I thought I was doing my job efficiently. But, the cost of that is being paid by these gas-based power plants, because nobody is willing to buy power from these plants at any price today. It’s available at such affordable and low prices across the country. Last few days I have been monitoring, particularly, because of the scorching heat and summer since the power demand has gone up significantly. I have been monitoring to make sure that we don’t see any stress in the system. And I am delighted to share with you that even through the last few days, power was available almost across the country any time of the day, including the peak hours at very very low prices. Probably, at prices which are 1/3rd or 1/4th of what they used to be 3 or 4 years ago. 1/3rd, that’s a deduction of over 60%, in some cases over 70% compared to what it was a few years ago.

Now when power has become so affordable, that’s how we are going to be able to get the DISCOMs in good shape, that’s how we are going to be able to get them to give 24/7 power to the entire country. And, of course, that will also be a challenge on renewables because that price has to come down, and there also we have had significant success. Wind, you saw just the first wind-based tariff-based bidding Rs 3.46, now, of course, that would be a price for certain regions where the wind load factor is very high. It may not necessarily be a benchmark, but I am confident as the volumes increase, this price could even further be better. And that’s the strength and power of honesty, where you run your programme in a non-discriminatory manner, where everybody has ability to bid and be a part of the business. It’s the power of scale. India added more than twice what it had the previous year, over 5000 MW of wind power in the last one year alone. Solar, of course, we are at about 4X what we were 3 years back.

And all of this has added scale, has brought new technologies and brought the prices down to affordable levels. Otherwise, ultimately, you can’t support the renewables if they are not at competitive prices, and in that same stream, the gas today will also have to become competitive. And, I think all those gas plants will have to move the needle, they cannot always be looking for crutches from the government. They will have to go around the world, look for cheaper sources of power, they will have to negotiate better terms, longer terms, and get, and any case power prices today are not that phenomenal that you can’t go out and get some gas contracts.

I am also trying. I am also trying if I can get some reasonable prices over the long run so that power tariff does not go up, power price remains affordable. But it can be nobody’s case that we stress the consumers of India with expensive power just because somebody invested a few years ago in a project today is not found viable or today does not have the kind of gas that it had few years ago. It’s not as if the government has stopped producing gas, some private sector company could not produce as much gas as they were at one point of time, cannot be the responsibility of people of India or of the government. So I think if we can get gas at affordable prices, if anybody can help us get that, if it’s possible to bring those prices at atleast some sense of parity, then we can look at supporting that industry and getting them back into action.

Energy efficiency has been the hallmark and one of the most important programmes of this government. In fact, when I look at the growth, while we are growing far faster than what it was in the previous 10 years, our first three years of power consumption growth has been more than the CAGR of the last 10 years. But one must also bear in mind that this is on the back of huge amount of energy efficiency measures. The company EESL alone has sold over 220 million LED bulbs, apart from LED tube lights, energy efficient fans, the PAT programme. But the private sector also has sold over 270 million LED bulbs and when you put all of that together and see what could be the potential growth in energy consumption if we had not implemented this energy efficiency programme. And Arunab you could do some study on that, independent study.

We actually found that it could have otherwise resulted in an additional CAGR of over 3%. So, effectively, the country could have seen 9-9.5% growth in electricity consumption, again, a virtue where we are saving electricity, saving your electricity bills becoming a cause of complaint and criticism. Of course, I don’t mind this kind of criticism, I am happy. Only thing is that the criticism comes from lack of understanding and research, and serious thinking behind what is said. In fact, that is what I had tried to share and kind of give food for thought in an interaction, in an informal interaction I had with some editors day before yesterday, which I am told yesterday was going around on Whatsapp as a message that I have threatened the editors or whatever. I have told them to mend their arrogant ways, some such word I read. I mean I just fail to understand either in this world we should just all of us stay at home or in our office and stop interacting with anybody for lack of being understood.

But all that I was saying was there should be more research, more understanding, more thought being given before one ranks anything. Because, after all, whenever anything is written or spoken, it carries weight. Suppose I say anything standing here, it carries some weight, not because I am saying it because I have a particular position and that position is saying. And, after all, you all listen to each word carefully to either pick a business opportunity, take a thought, an idea or pick a fault, anyone of them. Which is all fine, even the fault is equally fine but what I only wish and that’s why I complimented you Arunab and your think tank for the detail in which you do your research for the proper analytical studies that you come up with. And they are often critical of my work, or critical of the government which is fine my way, as long as it is a studious research, as long as it is based on fact and serious thinking. And that’s all that I was trying to tell friends in an informal conversation. But it’s sad I think not much can be done in some areas.

But I am delighted that the railways has also joined the energy efficiency movement and has tied up with EESL so that we can have 100% LED being used throughout the railways. I think even our, if you go to see, I don’t know if any of you may be people who don’t travel in railways. I still do, and I see a distinct improvement in the way the railways is kept, cleanliness of the toilets. I make it a point to go to the toilets in every station which I use in the railways. The metro is a shining example of very efficient working. But I go to railways, go to Shri Mahavirji, for instance, in the railways, so I go through two other states right into Rajasthan into the interiors – spick and span railways stations, clean as hell, a lot of encroachments are out on the railways stations, new escalators are being put up. I always go to the toilet and I see a marked difference and an improvement.

So I can see that the railways are really working hard in different areas to bring in efficiency, bring in better customer service, passenger amenities, freight. For the first time in years and years, and I myself used to complain till two years ago, for the first time Mr Prabhu called me every month to demand more railway freight for his system from the coal industry. He said, Piyush you had promised me so many rakes in the beginning of the year, they are not happening, they are not happening. That’s the kind of leadership that this country needed and I am delighted that Mr Suresh Prabhu has changed the way the railways used to function, has changed the thinking of the railways from one of populism to one of efficiency, to one of serious customer satisfaction, to one of implementation rather than promise, and to one which is going to become the engine of India’s future development.

Thank you to the railways. Thank you to all of you.


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