Modeling as a tool for the Indian Railways

-TERIApril 8-9, 2005

About TERI

The development-energy-sustainability nexus

Energy-economy linkage Drivers of energy demand

Population (total, rural/urban distribution) Overall/ sectoral GDP

Per capita energy consumption India: ~400 kgoe/capita; US: >8000 kgoe/capita

Energy intensity: final energy consumption per unit of GDP

Energy intensity curve

UK

US

Germany

Former Soviet Union+ the CEE countries

France

Japan

Italy

DCs

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01800 1850 1900 1950 1995

koe/

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TRANSPORT SECTOR -OVERVIEW

Trends in energy use

Energy consumption (PJ)

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Industry Agriculture Residential Commercial Transport

Industry & transport sector energy requirements – main concern areas

Impact on petroleum imports & power requirements

Passenger and freight movement projections (BAU)

Passenger movement (bpkms)

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Modal Split in the Transport Sector

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Concerns in the sector

Crude import dependence would increase to 94% by 2030 - IEA projections

Transport sector 2nd largest consumer of commercial energy Largest consuming sector of oil products Limited scope to move to alternative fuels

Inefficient energy trajectory for the transport sector

Increasing GHG & local pollutants

Towards a sustainable transport sector

Share of Railways should be increased as far as possible

Share of public transport to be increased

Efficiency of all transportation options should increase

Emission loading must reduce

Transport sector issues National Transport Policy Committee

Recommendation 72% freight & 60% passenger traffic movement

recommended by rail Consumers preference for door-to-door movement

Railways – larger social welfare dimension Cross-subsidization Need for investments on loss making routes Scope for freight modifications/ routings need to

be judiciously analysed & modified

Way forward for IR

Increase rail based movement as far as possible

Increase turnaround of wagons / improve utilization of dedicated wagons

Examine scope for freight rationalization Enhance interconnectivity & multi-modalism Improving rail technology and capacity

augmentation

TERI’S activities in the modeling & transport areas

TERI’s experience in modeling

Models Demand forecasting (EViews) Accounting Frameworks (LEAP) Optimisation softwares (MARKAL, GAMS LP models) Analytical tools/data analysis

Some recent projects Modeling projects

CIL Study of Coal in Indian Energy Scene Asia Least Cost Greenhouse Gas Abatement Study (ALGAS) National Energy Map – Vision 2020 (using MARKAL)

Transport sector studies Study on the Potential for Sustainable Tourism Development in

the Darjeeling Hill Area Transportation Economics and Environmental Issues that

influence product strategy (TELCO) Urban transport, Energy and Environment – A case of Delhi An Indo-British Partnership: Sustainable Transport in Large

Indian Cities

COLPLAN – A Coal Transportation model

Objectives of COLPLAN Examine the use of available coal (indigenous

and imported) at the existing power plants under the BAU case

Assess the competitiveness of coal from various sources (imported vs domestic coal) at each of the locations

Analyze the existing linkages to see if these are most optimal (least cost for the energy system) and examine possibilities of alternative linkages by developing alternative scenarios

Structure of COLPLAN model

STRUCTURE OF THE COLINK MODEL

movement of unwashed coal to plants

COAL movement of unwashed COAL movement of washed COAL UTILIZATION transmission of ELECTRICITYMINING coal to washery WASHING coal to plants FOR POWER power to region SUPPLY

GENERATION

MINE 1 REGIONAL D grade coal DEMANDE grade coal 1F grade coal

MINE 2 REGIONALF grade coal DEMANDG grade coal 2

T&D LINES

COAL FIELDS WASHERIES THERMAL PLANTS TOTAL POWERDEMAND

EMISSIONS TOTAL SYSTEM COST

Gradewise calorific input & output costsInfluencing value efficiency PLFCharacteristics Pithead price cost availability

by grade capacityAsh & moisture heat ratecontent pollution control equipment

RAIL NETWORK

PLANT 2

PLANT 3

PLANT 1

WASHERY

Features of the Coal Transportation model

GAMS (Generalized Algebraic Modeling Systems) based static LP model

Optimizes system cost for coal utilization by the Indian power sector

Module added to study ash utilization by Indian cement sector

Scenarios BAU Free linkage Free run Restricted Linkages & grade

slippage

Comparison of total costs

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Billion Rs

BAU Free linkage Free run Grade slippage

Non-optimality of linkages

The model indicated significant reduction in the freight component through alternative linkages CIL to re-examine the viability of the

current linkages Capacity release for IR -> gains

through moving other commodities

Results (cont.)

CIL to direct more investment to the Western sector coalfields, Singrauli and Sohagpur coalfields

Overall benefits to the economy with improvement in quality of supplies Gains to CIL with move to superior grades of coal Consumers would benefit by savings in coal

movement Quality improvements essential for CIL to guard

against the loss of its markets to imported coal

Some results from the ash module

Objective Hypothesis : Fly ash can be used effectively

to: reduce environmental damage provide economic benefits to its users

especially cement producers Examine whether flyash should be charged,

subsidized or continue being provided free of cost

At what delivered cost of ash would it still be economical to produce PPC (based only on cost of coal displaced)

Data & Assumptions All data & assumptions for 2001/02 Demand centres: Individual power plants

& 9 cement plant clusters Linkages as per SLC (Short term) Actual production PPC : OPC :: 65% : 35% Average delivered cost of ash: Rs 600/ton Coal imports max 20 MT

Economic benefits with higher PPC production: model results

Shifts towards PPC production lead to reduction in overall system costs With no constraints on OPC/PPC

production, model shifts all production to PPC

With new cement capacity to be created (30 MT), PPC remains the only choice for all the new capacity

Additionally environmental benefits due to decrease in CO2 emissions 

Monetary benefits in system costs

Figure 2. Monetary Benefits in system costs

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Scope for negotiation of ash prices

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Cost of ash (Rs/ton)

Fig 3. Sensitivity of PPC production with delivered cost of ash

With judicious pricing both power & cement plants can be gainers

Preference towards superior grades of coal Reduction in coal requirement results in

adjustments of coal off-take B-D grades increase E-G grades decrease A grade always utilized

domestic coal industry needs to review its coal production & pricing policies directed towards enhancing supplies of better quality coal as this would lead to overall system benefits

PPC production – a “win-win-win” option

If priced right, all parties could benefit Power plants – cost saving on ash handling

& disposal Cement plants – save on account of cost of

coal displaced and limestone saved Environment – reducing air pollution due to

particulates and one tonne of clinker saved is one tonne of CO2 saved

Thought……

Is it worthwhile for the Railways to consider using the dedicated coal wagons for moving back ash from the power plants to cement plants on the way?

Thought…….

Can freight rates be modified to make Railways more competitive for some core commodities along major O-Ds?

Scope for Collaborative Projects

Possible areas for co-operation

Demand forecasting – to plan for infrastructure requirements in the future

Freight rationalization studies - to capture markets which Railways may be losing

Efficiency analysis/ Energy audits

Thank you!