Modeling as a tool for the Indian Railways -TERI April 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 Energ y intensity: final energy consumption per unit of GDP

Drivers of energy demand

Population (total, rural/urban distribution)

Overall/ sectoral GDP

Per capita energy consumption

India: ~400 kgoe/capita; US: >8000 kgoe/capita

Energ y intensity: final energy consumption per unit of GDP

Energy intensity curve kgoe

TRANSPORT SECTOR -OVERVIEW

Trends in energy use Industry & transport sector energy requirements – main concern areas Impact on petroleum imports & power requirements

Industry & transport sector energy requirements – main concern areas

Impact on petroleum imports & power requirements

Passenger and freight movement projections (BAU)

Modal Split in the Transport Sector

Concerns in the sector Crude import dependence would increase to 94% by 2030 - IEA projections Transport sector 2 nd 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

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

Transport sector 2 nd 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

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

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

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

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 S tudy 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

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

S tudy 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

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 COL PLAN model

Features of t he 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

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

BAU

Free linkage

Free run

Restricted Linkages & 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

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

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)

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

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 CO 2 emissions

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 CO 2 emissions

Monetary benefits in system costs

Scope for negotiation of ash prices 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

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 CO 2 saved

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 CO 2 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

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!