Trains do power each other - it’s exactly how third rail regeneration works, because the “short substation sections” are connected together in most normal circumstances.
Regenerative braking is more about making use of power which would otherwise be dissipated as heat, and therefore wasted. Trains are still limited by the peak power delivery of the substation, as you can't assume that another train will be providing energy to allow for a greater current demand. What seemed to be described earlier is using batteries from multiple trains in order to power each other, allowing an increase and hence longer trains. I can see that being done with on-train batteries acting as bulk capacitors, so the peak draw during acceleration can effectivley be spread out during braking and linespeed running, but again you can't assume that other trains will always be around to provide that power instead.
This is down to a complex balance of power, weight and cost. If the batteries are on board the train then the train is heavier and needs more power to accelerate at the same rate - so is it actually counterproductive? My gut feel at the moment is that it would be, but I can't support that with any evidence. Putting the batteries on the trackside gets round that issue and also removes limits on battery weight and volume, but makes the idea less effective because the resistance of the third rail between the train and the batteries limits the possible current in both directions and dissipates some of the stored energy as heat. Hence there is a tradeoff between larger and possibly more efficient batteries and smaller ones closer together, and they also need to consider fault conditions and engineering isolations when all sources of power have to be disconnected. There's also a whole raft of questions about charge/discharge rates to support hard acceleration and deceleration - capacitors are better than batteries in this respect but worse for amount of energy stored in the same weight or volume. And obviously whatever is done has to be cost-effective - what is the financial benefit of better acceleration?
The 14,000+ electric buses in China use ultra-capacitors for their quick charge / discharge capabilities, but charge and each bus stop! They have a small battery back up too as capacitors only hold their charge for a relativity short time.
May Modern Railways says Vivarail used those batteries for a while in a 230 prototype but have now got some better ones. So if they were "buyer collects Long Marston" you may well be right.
Note that the "30 times more fuel" doesn't mean the consumption per mile of a diesel bus is that of 30 cars, it takes into account that the average bus spends much more of its time operating than the average car.
For freight it needs to be hydrogen. We could take a lesson from the steam era and carry the fuel in a tender behind the locomotive.
For freight its LNG which is being used in the States and Russia. LNG virtually eliminates NOx and PM emissions and existing Locos can be retrofitted (kits are available for EMD 710 engines)
