The Railways Energy Management Company Ltd. (REMCL), active in the business of power management and power generation in India, has secured its largest contract yet from the Indian Railways for 3 GW solar power capacity. It has been mandated by the Indian Railways to handle tender proceedings, installation supervision and manage power supply from this capacity that will be set up on vacant land owned by the railways which has already been identified. This land will be leased to REMCL on nominal lease rent levels.
REMCL is a subsidiary of government owned transport and engineering consultant RITES Ltd. The Indian Railways owns a 49% stake in REMCL, which is mandated to handle all power procurement, renewable energy and energy efficiency projects for the railways.
In a statement to announce this development, RITES Ltd. said this 3 GW capacity is planned to be set up in 3 phases of 1 GW each. The first and third phases of 1 GW each will be developed as a public private partnership (PPP) based on a design, build, finance, operate and transfer model (DBFOT).
The remaining 1 GW as part of the second phase will be based on an ownership model of REMCL eligible for capital subsidy under the Central Public Sector Enterprise (CPSE) investment scheme, stated RITES. All of the 3 GW capacity is to be installed by FY 2022-23.
The arrangement allows REMCL to earn a bid management fee and in the long term secure revenues worth INR 200 million ($2.64 million) annually through supply management from these installations during the entire life of the project.
"This is the largest mandate received by REMCL for tendering, installation and power management of solar energy. This will strengthen REMCL's position as the green energy solution provider and energy manager to Indian Railways and firmly establish REMCL in green energy sector in India," said Chairman and Director RITED Ltd., and Chairman REMCL, Rajeev Mehrotra.
In early May 2020, REMCL invited bids for 1 GW solar power capacity to be developed on railway land in various states (see 1 GW Solar Tender Launched For Indian Railways).
It has been long since the Indian Railways has been planning to incorporate solar in its power supply and to also put vacant land around the railway tracks and stations to good use. In February 2018, Minister of Railways Piyush Goyal had shared the Indian Railway's plans to issue tenders for up to 3 GW solar power capacity to be developed on its unused land to which state backed miner NLC India said it will bid aggressively (see Indian Railways To Tender 3 GW PV).
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