The modern railway system is a massive grid connected complex system with distributed active loads (trains), sources (particularly distributed renewable sources), and storage (wayside or on-board storage systems). Its energy management therefore requires the concepts and techniques used for managing energy in the smart grid (SG). Accordingly, the new railway energy management system (REM-S) is developed to integrate on-board, wayside, and coordination services. REM-S is driven by the idea that regeneration, loads, storage, and volatile distributed energy resources should be coordinated dynamically to achieve optimal energy usage. This paper presents the proposed REM-S architecture, which is based on a hybrid centralized–decentralized concept and developed according to SG architecture model framework.